Swisscom to ‘rethink’ fibre deals, considers solo operation

16 Sep 2011

Switzerland’s incumbent and largest provider of wireless, fixed and broadband services by subscribers, Swisscom, has brought its fibre-optic rollout plans to a halt after a ‘de facto ban’ from the nation’s regulator, the Federal Competition Commission (ComCom). As previously reported by CommsUpdate, earlier this month ComCom published the results of its assessment of a series of agreements between Swisscom and local utility providers, expressing its disapproval regarding aspects of the agreement. The ventures set out to share the costs of deploying fibre-optic cables in Swiss cities using a multi-fibre model. Under the terms of their contracts, the utility companies own the rights to lease lines to third parties, whilst Swisscom utilises several itself. The model was given the green light by roundtable discussions chaired by ComCom and involving the industry’s key players.

ComCom’s concerns centred on clauses in the deals that allow Swisscom to influence the pricing structure of its rivals utilising its fibre network by setting price floors for certain services. The consequences to competition were deemed unreasonable, and the regulator threatened to impose sanctions, although it would not take steps to prevent the deployment of fibre.

The incumbent released a statement today saying that, as a result of the watchdog’s findings, it was ‘compelled to carefully examine all agreements concluded to date with its partners in order to determine whether the partnership model can be adapted at reasonable business risk.’ Further deals that have been negotiated but not signed have been shelved for the time being until the telco can ‘rethink the underlying partnership model’. If it is unable to renegotiate the contracts, ‘Swisscom cannot rule out the possibility of having to go it alone’.

To date, the agreements represent an investment of CHF1.7 billion (USD1.94 billion) and, including the unsigned agreements, would cover 30% of Swiss homes.