Federal Assembly shoots down two proposals to reform Swisscom

5 May 2017

Switzerland’s parliament, the Federal Assembly, has rejected two motions concerning the operational and ownership structures of state-owned incumbent Swisscom. The first motion proposed that the Swiss Federation should no longer be the majority shareholder in the operator, claiming that the provider’s dominant position in the market has had a distorting effect on competition in the sector. The motion’s proponent – Natalie Rickli of the Swiss People’s Party (Schweizerische Volkspartei, SVP) – argued that Swisscom is too concentrated on profits and has invested too little in the development of infrastructure in remote areas and has excessively priced wholesale access to its network. The politician added that the Swiss Federation could retain a minority stake in the company, and that the majority of Swisscom’s shares should be held by Swiss nationals. Opponents of the proposal pointed out, however, that reducing the state’s stake in the incumbent would not redress any competition issues in the market. Further, the Federal Council argued that the country benefited from Swisscom’s ability to internally finance upgrades and expansion work without an injection of funds from taxpayers. The motion was defeated 55 votes to 114.

A second proposal, put forward by the Green Party’s Balthasar Glattli, argued for the separation of Swisscom into two distinct entities, one to operate the infrastructure and another to handle the provision of services over those networks. According to Mr Glattli, the current combination of these functions into a single company has led to unfair competition, as other service providers are reliant on Swisscom’s network, allowing the telco to ‘dictate the conditions for the competition’. In its rebuttal the Federal Council suggested that the proposal amounted to a call for all telecoms infrastructure in Switzerland to be nationalised, including that of privately-owned providers such as cableco UPC Switzerland. Consequently, the council claimed that there was insufficient evidence to support such a ‘drastic intervention’ in the market. The motion was defeated by 29 votes to 161.

Switzerland, Swisscom