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Press release

No revision of the Telecommunications Act

Berne, 27 October 2011

The Price Controller has compared in a short analysis the fixed-line Internet offerings in Switzerland with those of four other countries and has called for a rapid revision of the Telecommunications Act. About a year ago, however, the Federal Council had declined such a revision, following an in-depth analysis of the entire telecommunications market. Swisscom shares the opinion of the Federal Council that there is no need for a revision and that any such revision would jeopardise the legal certainty essential for investment.

Many telecom customers today use a whole bundle of in part combined offerings such as telephony, fixed-line Internet, television and mobile phone. However, in his analysis the Price Controller compared only the Swiss fixed-line Internet market with four other countries and is calling for a rapid revision of the Telecommunications Act.


Comparisons by renowned institutions put Switzerland in a positive light

Broadly based studies by internationally renowned institutions reveal another picture of the fixed-line broadband markets, however. OECD studies show that, adjusted for purchasing power parity, Switzerland lies in the mid-range in terms of broadband connections. Broadband prices per Mbps in Switzerland are also in the mid-range in an international comparison. The Price Controller fails to take purchasing power parity into consideration, however, which in view of the weak Euro is particularly disadvantageous for price comparisons with the Swiss market.

For Internet customers, access to the services offered is not the most important factor but rather the actual bandwidths that can be used. A recent report by Akamai shows that Switzerland comes off a lot better than its neighbouring countries in a comparison of these figures.

The comparison made by the Price Controller is a snap-shot of the period March to April 2011; the market is, however, dynamic in nature: Swisscom has since massively increased bandwidths for its customers at unchanged prices. An extensive analysis consequently reveals that if you factor in first-class coverage, good quality and the comparatively high production costs in our country, the Swiss broadband market does well in an international comparison.


Managing market shares via regulation provides the wrong incentives

The price is only one element for customers in the telecoms market; decisive is, however, the overall picture, including the offering, range, quality and customer satisfaction. This is borne out by a number of studies. The Price Controller's report also reveals that the Swiss market has the highest penetration (subscriptions per inhabitant) and the second-highest intensity of competition between infrastructures.

There is fierce competition in Switzerland over infrastructure with the cable network operators. The report criticises, however, Swisscom's high market share and draws on this as a reason for the need for intervention in the market. Swisscom has invested a lot of money in customer service in recent years, however: 40% of Swisscom Switzerland employees work at the customer front and Swisscom receives the highest level of customer satisfaction in surveys. In this environment, managing the market share of the various providers via the intervention of the regulator provides the wrong incentives.


Demand of the Price Controller is at odds with the market

On the basis of the examination of only part of the facts, the Price Controller is calling for a rapid revision of the Telecommunications Act, after the Federal Council and the responsible commission came to the opposite conclusion on the basis of an extensive examination of the telecoms market in September 2010. The Price Controller's call for a revision fails to take into account the high costs in Switzerland, in particular for salaries and construction, the implications for the telephony market in the fixed-line and mobile market, consumer interests and the expansion of the optical fibre network. What is more, a supplementary report of the Federal Council is to be published at the beginning of 2012. It is astonishing that the Price Controller is pre-empting another authority instead of submitting all findings to the administration in an overall context and in coordination with this supplementary report.

The current Telecommunications Act brought about the desired level of network competition and investment and attracted new market players (e.g. utilities companies) into the market. Swisscom is therefore of the same opinion as the Federal Council that there is no need for a revision of the Telecommunications Act.



Swisscom AG
Media Relations
3050 Bern