Swisscom faces fine by Swiss government

Apr 10, 2006

Swisscom has flatly rejected accusations by the Swiss government that it has deliberately and systematically overcharged foreign competitors for using its network. Whether or not the Swiss carrier is found guilty as charged, one thing is clear: Those in the industry will be looking closely at the outcome, as Swisscom is unlikely to be the only company to be accused of such actions.

On Monday the secretariat of the Swiss government's competition commission said it would impose a $376 million fine following its investigation into how the carrier charges its mobile termination rates. Termination rates are fees that are charged by mobile network operators to other carriers for routing them into their own networks for connections.

The government started looking into how termination rates were changed by three mobile carriers operating in Switzerland, namely Sunrise of Denmark's TDC group and France Telecom's Orange network from October 2002. While the investigation still continues, only Swisscom Mobile has been found by the committee of charging fees excessively between April 1, 2004 and May 31, 2005.

Since June 2005, however, Swisscom has slashed its termination rate by 40 percent and stated that it "rejects the allegation of misuse and views the threatened sanction as unjustified."

"Swisscom Mobile does not hold a dominant position in the Swiss mobile communications market, nor can it be accused of misuse. Swisscom will defend its stance against the proposed ruling," the company said. The carrier is expected to appear before the commission on May 22, and it argued that it has been charging the lowest mobile termination fees of any Swiss mobile carrier and does not derive any benefits from termination fees on other carriers.

Indeed, the company said that is has actually been making net payments to both Sunrise and Orange based on lower price and higher outgoing call volumes.

Furthermore, Swisscom Mobile stated that it "could not and cannot estimate the price level that the Competition Commission regards as non-discriminatory. To date, no legally valid decision has been made regarding the market limit for termination fees, nor are there any indications of the criteria by which a non-discriminatory price is to be measured. Taking into account location-specific costs and purchasing power, Swisscom Mobile's mobile termination fees are within the European average."

A former state-owned operator that continues to dominate the domestic market, Swisscom said that if the fine must ultimately be paid in full, then it may have to set aside provisions to cover it, which in turn could adversely affect its net income for the current fiscal year.

Yet investors largely took the latest development in stride, as Swisscom shares ended the day up slightly by 0.1 percent on the New York Stock Exchange Monday to $32.60.

Copyright 2006 by United Press International

Explore further: Microsoft Research project can interpret, caption photos

Related Stories

Biosensor may improve clinical diagnosis of influenza A

16 minutes ago

Sensors based on special sound waves known as surface acoustic waves (SAWs) are capable of detecting tiny amounts of antigens of Influenza A viruses. Developed by A*STAR researchers, the biosensors have the ...

Scientist provides new fluid dynamics insights

17 minutes ago

New calculations by a theoretical astrophysicist at The University of Alabama in Huntsville (UAH) provide tools that open a door to exploring the history of events in astrophysical flows and in plasma fusion ...

Uncovering diversity in an invisible ocean world

4 minutes ago

Plankton are vital to life on Earth—they absorb carbon dioxide, generate nearly half of the oxygen we breathe, break down waste, and are a cornerstone of the marine food chain. Now, new research indicates ...

Protecting food, energy and livelihoods in Punjab

23 minutes ago

The state of Punjab spearheaded the Green Revolution that has transformed Indian agriculture. Encouraged by price guarantees, expanded irrigation and the introduction of high-yielding crop varieties, Punjabi ...

Faster evolution not responsible for tropical biodiversity

23 minutes ago

It's been known for more than 150 years that the tropics are home to far greater numbers of animal and plant species than the planet's temperate regions. But despite decades of study, the causes of this striking ...

Recommended for you

Microsoft Research project can interpret, caption photos

25 minutes ago

If you're surfing the web and you come across a photo of the Mariners' Felix Hernandez on the pitchers' mound at Safeco Field, chances are you'll quickly interpret that you are looking at a picture of a baseball ...

App data vulnerability threatens millions of users

1 hour ago

Researchers of the Technische Universität Darmstadt and Fraunhofer SIT have investigated Cloud databases and established: developers wrongly use authentications for cloud services thereby threatening millions ...

Mathematician designs social sustainability software

1 hour ago

Edgar Antonio Valdés Porras has designed a software and service-oriented theoretical methodology supporting sustainability for cities, which if implemented, would increase economic impact points and infrastructure ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.