Swisscom increases speed, effectiveness and flexibility in move to becoming corporate group
25 August 2000
Swisscom is altering its organisational structure to ensure competitiveness in a rapidly changing telecommunications environment: the company, which currently has a parent company structure, will be gradually transformed into a group of operationally independent companies by the end of 2001. This will ensure clear allocation of responsibility for results. It will also allow the companies to focus on their sub-markets and increase transparency and attractiveness in the capital and employment markets. Swisscom will systematically continue to implement the verticalisation introduced in the Progress project of 1999. The transformation into a group will not result in additional job cuts. Swisscom will also focus its foreign telecommunications holdings in the growth market of mobile communications and sell some of its holdings in fixed-network oriented companies.
The decision of the Swisscom Board of Directors provides for the transition from the current parent company structure to a group organisation. The transition will take place step by step and will be completed by the end of 2001. The main characteristics of the new organisation are a smaller headquarters and the outsourcing of individual business areas into operationally independent units. The Executive Board, which is currently responsible for the entire company, will be replaced by largely autonomous business management levels in the operational units and a group management level focussed on financial and strategic matters.
"The new corporate organisation lays the foundation for Swisscom´s future," Markus Rauh, chairman of the Board of Directors, said of the decision. "The new organisation simplifies the management structure and creates the transparency and flexibility necessary to succeed in the fast-changing telecommunications environment." Swisscom CEO Jens Alder remarked, "The responsibility for results will be clearly assigned in a corporate group, the individual businesses can concentrate fully on their markets and strategic partnerships can be formed in the individual sub-markets. Swisscom will become a more attractive employer for highly-qualified and ambitious executives, obtaining resources on the financial markets will be made easier and value transparency will increase."
The Board of Directors has taken the following decisions to ensure the step-by-step transformation of Swisscom into a group:
Setting-up a group management level focused on financial and strategic matters in place of the current Executive Board which bears responsibility for the entire company.
Creation of a much smaller group headquarters containing the departments required for group management (Finance & Controlling, Strategy & International, Corporate Communications, Corporate Management Services, Human Resource Management and Chief Information Officer).
Hive off Mobile Com as a separate stock corporation.
Decision for further outsourcing. Such decisions will be taken on a case to case basis by the Board of Directors, in line with the development of the markets and further analysis.
The decisions of the Board of Directors will not lead to additional job cuts - any more than previously announced.
Dominik Koechlin, a member of the Executive Board for four years and head of the Strategy & International division, which will be made into a headquarters department, has decided to resign from his position effective 1 January 2001 for personal reasons. CEO Jens Alder paid tribute to Dominik Koechlin for his services to Swisscom. Koechlin was involved in the comprehensive restructuring processes "Change" and "Progress" and in the Swisscom IPO. He saw through the debitel acquisition (over CHF 4 billion) and the streamlining of the international holdings. Even after 1 January 2001, the CEO will continue to assign strategic projects in the field of international cooperation to Koechlin, who possesses broad experience in his field.
Concentration on mobile communications in international business
In the field of international business, the Board of Directors approved the strategy to focus the holdings on the future market of mobile communications. Swisscom will sell its 50% holding in tesion in Baden-Württemberg to the joint owner Energie Baden-Württemberg (EnBW). Swisscom also intends to sell its holding in the Alsatian company Estel. With respect to Swisscom SpA, negotiations are currently underway in order to develop future business opportunities with potential partners. Swisscom does not intend to withdraw from the nationally operational UTA Telekom AG, the number 2 in Austrian telecommunications. An IPO in line with corporate strategy is planned for UTA, in which Swisscom has a holding of 50% and one share. However, a definite decision has not yet been made, and a date for a possible IPO has not yet been set.
After withdrawing from the UMTS auction in Germany, Swisscom and its subsidiary debitel, the number 3 in the German mobile communications market, will focus more intensely on expanding the customer base, mainly in the field of mobile communications. Swisscom and debitel are aiming to forge strategic partnerships with a view to harnessing the value added potential in the future UMTS market. These could range from a pure retailer model to a virtual network operator model. Initial negotiations with potential partners have already commenced.