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Press release

Competition in the broadband Internet market

18 December 2003

According to a ruling published today, the Competition Commission (COMCO) has determined an abuse of market dominance by Swisscom in the field of ADSL services. Swisscom rejects this claim: The market for broadband Internet access is subject to intense competition, which has led to an extremely high rate of growth in such services in Switzerland. Swisscom intends to lodge an appeal with the Appeals Commission against the COMCO decision.

Switzerland is experiencing a veritable boom in broadband Internet access as well as ADSL. Within the space of a year, the number of ADSL accesses rose from approximately 200,000 to over 500,000. Around 17% of Swiss households are already equipped with ADSL. As announced on 2 December, Swisscom will be doubling the current ADSL bandwidth for residential customers from the middle of February.

ADSL technology is in direct and intense competition with the broadband Internet offerings of cable network operators, which are experiencing a similar boom. If one looks at the broadband Internet access market as a whole, then Switzerland is easily one of the highest-growth countries. Customers benefit from ongoing enhancements in performance (bandwidth) as well as extremely favourable prices.

The COMCO decision therefore contradicts economic reality. This contradiction is based on an isolated appraisal of the competitive situation and an incorrect evaluation of the reciprocities between end customers and wholesale markets. The strong market position of the cable network operators was accorded too little attention in the authority's examination of wholesale markets. On account of the current market situation Swisscom does not dominate the market.

Swisscom also rejects the COMCOM claim that its subsidiary, Bluewin, was given preferential treatment on the basis of a special discount system. Swisscom offers discounts to Internet providers based on economies of scale, and all Internet providers who have reached a defined customer volume benefit from such bulk discounts.

In its decision, COMCO confirms that there is no cross-subsidisation of Bluewin. In so doing, the authority shares Swisscom's view that Bluewin exhibits no structural deficit.

Following a comprehensive evaluation of the decision, Swisscom is to lodge an appeal with the Appeals Commission.

Berne, 18 December 2003


Swisscom AG
Media Relations
3050 Bern