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Press release

Swisscom sells debitel to the Permira Funds

30 April 2004

Swisscom is selling its investment in the network-independent mobile company debitel to the funds advised by the private equity company Permira. The selling price for 95% of debitel shares, including those in respect of the 2% holding acquired beforehand from Electronic Partner, is EUR 640 million (equity value). For some time, Swisscom has been managing its interest in debitel as a financial investment.

As a network-independent telecommunications company, debitel provides mobile, fixed network and Internet services to over 10 million customers and employs some 3,100 staff in Europe. Swisscom acquired a 74.2% interest in debitel in summer 1999 on strategic grounds; this was later increased to a 93% interest. The expected synergies failed to materialise due to differences in the business models of Swisscom and debitel and the performance of European mobile communications markets following the auction of UMTS licences. As a result of this, Swisscom managed debitel as a purely financial investment. Swisscom has now decided to realise the value of its investment in debitel.

In the Permira Funds, Swisscom has found an investor who will continue to develop debitel's business in line with the current 'Enhanced Service Provider' strategy. Swisscom is granting the buyer a vendor loan note of EUR 210 million for the purchase. After deduction of this loan, Swisscom will receive EUR 430 million in 2004 from the sale of its investment in debitel. The parties have agreed not to disclose any additional details regarding the transaction.

The takeover is subject to approval from antitrust authorities. The transaction is expected to be completed by the end of June 2004.

Berne, 30 April 2004


Swisscom AG
Media Relations
3050 Bern