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Press release

Swisscom increases stake in Swisscom IT Services to 100%

23 December 2004

Swisscom has acquired AGI Holding, which holds 28.9% of the shares of Swisscom IT Services Ltd. As a result of this Swisscom has increased its stake in Swisscom IT Services Ltd, which is active in the IT outsourcing business, from 71.1% to 100%. The participation held by AGI Holding arose as a result of the merger of AGI Informatik with Swisscom IT at the beginning of 2002. IT activities are of major strategic importance for Swisscom. The company is looking to secure a leading market position in the area of IT outsourcing.

In stating the reason for the demerger to shareholders Jens Adler, CEO of Swisscom Ltd and Chairman of the Board of Directors of Swisscom IT Services (SCIS), said that 'The takeover of 100% of the strategic group company Swisscom IT Services is a logical step forward'.'We are looking to develop the business further in a targeted manner and to act as a neutral IT service provider for various software platforms for, amongst others, cantonal and regional banks. In addition, SCIS will also remain active in a range of other sectors such as telecommunications, healthcare, media and public authorities.'Over recent months SCIS has been able to win orders from customers including Credit Suisse, the Swiss government, Tamedia, KPT, CSS and Ascom.

The landscape of IT systems for banks is currently being reshaped. SCIS regards this as an opportunity to win new clients for migration, operation and maintenance. Just recently eleven regional banks decided to transfer the operation of the Finnova-Software-Platform to Swisscom IT Services.

The purchase price for AGI Holding is CHF 115 million. This purchase will result in a reduction of the Equity Free Cash Flow (EFCF) for the Swisscom Group in 2004 of the same amount. In accordance with the dividend policy, the EFCF will be distributed in full to shareholders in the form of dividend payments and a share buyback.

Swisscom IT Services came into being on 1 January 2002 as a result of the merger of Swisscom-Informatik and AGI IT Services. AGI IT Services was the IT provider for the AGI cooperation banks, namely the eight cantonal banks Appenzell (participation of 2.2% in AGI Holding), Fribourg (11.9%), Glarus (4.1%), Lucerne (26.8%), Obwalden (3.8%), Nidwalden (3.0%), St. Gallen (27.4%) and Thurgau (20.9%). The four smaller AGI banks (Appenzell, Glarus, Obwalden and Nidwalden) decided in spring 2004 to change to the Finnova platform and to continue to transfer the IT operations to Swisscom IT Services. The larger AGI banks (Fribourg, Lucerne, St. Gallen and Thurgau) are currently evaluating their future IT strategies including IT platforms and operations.

Swisscom IT Services in brief

Swisscom IT Services (SCIS) is a leading Swiss IT provider with many years of experience as an operator and integrator of complex IT systems. The company. with around 2,100 employees. has years of expertise and wide-ranging competences in the telecommunications and financial services sectors. In 2003 SCIS generated revenue of CHF 755 million, including CHF 541 million from services provided for the Swisscom Group, CHF 165 million from AGI customers and CHF 49 million from third-party customers. Revenue from third party customers is currently experiencing sharp growth.

Berne, 23 December 2004


Swisscom AG
Media Relations
3050 Bern