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Press release

Swisscom reduces interconnection prices and opposes additional telecommunications regulation

15 October 2002

Swisscom is to reduce interconnection prices for 2003 by an average of 5 percent. The reduction will keep Swisscom prices on a par with the rest of Europe and constitutes a fair, transparent and consistent implementation of the regulatory requirements. Interconnection refers to the networks of Swisscom and those of alternative providers. In a statement issued today to the Federal Office for Communications (OFCOM), Swisscom declared its firm opposition to the proposal to regulate access comprehensively by extending the present interconnection regime, and to the unbundling of the local loop (ULL).

Since 1998 Swisscom has been offering cost-driven interconnection prices which, as of 2000, were calculated according to the LRIC method. Depending on the individual service being offered, the new calculation for 2003 will lead to an average price reduction of 5 percent. The prices include only the relevant interconnection charges, but no profit margin. The method used by Swisscom is based on international experience and empirical data.

Interconnection prices (see Table at the end of this communication for details) differ depending on service and usage. Based on effective traffic distribution (standard rate 38%, off-peak rate 62%) and an average call duration of four minutes, the average price for regional termination in 2003 will be 1.39 cents per minute.

 

Unbundling the last mile is an unsuitable recipe

In a statement issued today to the Federal Office for Communications (OFCOM), Swisscom declared its firm opposition to the Federal Council's proposal to regulate access comprehensively by extending the present interconnection regime, and to the unbundling of the local loop (ULL). Swisscom is particularly opposed to the proposal to replace the effectively enshrined law governing abuse with an interventionist system (ex-ante regulation). In Swisscom's opinion the planned measures constitute an unsuitable recipe for encouraging competition. They intensify state regulation to an unnecessary extent and, by so doing, create serious disadvantages for the telecommunications sector and the information society. No proof of the need for additional regulation has been furnished. Moreover, unbundling the last mile has proven a poor stimulus to competition in European industrialised countries and the USA.

To date, liberalisation of the Swiss telecommunications market has been successful, leading to intensive competition and the associated price reductions (some massive) as well as a huge variety of telecommunications services. In the case of fast Internet access in particular, there is genuine competition between various service providers using the infrastructures of Swisscom and cable TV operators. This competition is sustainable and is optimising the price/performance ratio for consumers. The proposal to unbundle the last mile would unilaterally disadvantage Swisscom and negatively impact future plans to connect peripheral regions to high-speed broadband infrastructures. Moreover, Swisscom regards an obligation to unbundle the last mile as a serious infringement of the company's basic rights. The proposal to introduce an unbundling obligation in the form of a mere decree therefore violates the constitutional authority not only of parliament but also, ultimately, of the electorate.

 

Current interconnection prices (in cents):

   Peak  Off-peak  Average
Traffic distribution  36 %  64%  100%
Regional termination      
Price per minute  1,72  0,86  1,17
Call Setup  1,54  0,77  1,05
Price per minute for 4-minute call  2,11  1,05  1,43
National termination      
Price per minute  2,71  1,35  1,84
Call Setup  2,01  1,01  1,37
Price per minute for 4-minute call  3,21  1,60  2,19

 

Prices under Swisscom LRIC effective 1 January 2003 (in cents):

   Peak Off-peak  Average
Traffic distribution  38%  62%  100%
Regional termination      
Price per minute  1,61  0,80  1,11
Call Setup  1,59  0,80  1,10
Price per minute for 4-minute call  2,00  1,00  1,39
National termination      
Price per minute  2,45  1,22  1,69
Call Setup  2,06  1,03  1,42
Price per minute for 4-minute call  2,97  1,48  2,05

Berne, 18 November 2002

Kontakt

Swisscom AG
Media Relations
3050 Bern

media@swisscom.com