Swiss lead Europe in telecoms service quality

Telecoms prices are tumbling right across Europe Keystone Archive

Switzerland is the undisputed European number one when it comes to overall quality of service in the telecommunications sector.

It also tops the list in terms of the overall price-quality trade-off.

These are two of the key findings of a report published jointly on Tuesday by Zurich University’s socioeconomic institute and specialist consultancy Plaut Economics.

However, some of the report’s findings have been criticised by key players in the Swiss telecoms sector – in particular service provider Sunrise and the federal price regulator.

The report was commissioned by ICT Switzerland, the umbrella organisation for the main Swiss IT and telecoms sector associations.

“We examined the economic importance of the sector from three perspectives,” Plaut Economics director Stefan Vaterlaus told swissinfo. “The customer view, contribution to the economy as a whole, and the impact of government regulation.”

“From the customer perspective, we found that Switzerland combines reasonable price levels with clearly superior quality levels – 20 per cent higher than Germany, which came second.”

The survey compared price and service levels in Switzerland with those in five other European countries – France, Germany, Austria, Italy and Britain.

Top of Europe

Vaterlaus said Switzerland topped the European quality league thanks largely to its infrastructure – in particular the high penetration of broadband connections (DSL and cable).

Regarding price, it came roughly in the middle of those countries surveyed, with an average monthly customer bill of SFr177 ($140) in 2002.

That compares with SFr186 for Italy at the top end of the range and SFr149 for Britain – the clear winner on price grounds.

Mobile phone costs represented 59 per cent of the total average Swiss bill, or SFr105 – again, roughly in the middle in cross-European terms.

Broadband prices were considered separately, due to inadequate internationally comparable data for the period.

But a separate study of 17 countries shows that Switzerland has some of the cheapest broadband prices.

Cheaper, broadly speaking

Overall, prices in Switzerland have dropped by 25 per cent since telecoms liberalisation began in 1998 – roughly in line with average European trends.

Mobile connection price reductions accounted for no less than 80 per cent of the total drop.

The report also explores the overall economic contribution of the telecoms sector and the economic effects of government regulation.

It found that the Swiss telecoms sector accounted for two per cent of total gross domestic product in 2002, or double the 1990 figure.

Questionable assumptions

Swiss federal price regulator Rudolf Strahm told swissinfo that the price comparisons were “not incorrect”, but questioned some of the assumptions underlying the study.

In particular, he said the higher overall purchasing power of Swiss consumers was effectively being used to justify higher telecom prices.

“The use of this so-called purchasing power and quality-adjusted calculation index cannot conceal the underlying fact that we have relatively high telecoms prices here in Switzerland,” said Strahm.

“This is particularly so in the mobile telecoms area, where you have to change service provider between caller and receiver!”

Sunrise, one of Switzerland’s main mobile and fixed-line service providers, has also distanced itself from the report, saying many of the findings reflect the views of market leader Swisscom, rather than of the industry as a whole.

A spokesman said the findings reflected Swisscom’s view that opening the so-called “last mile” to competition – in particular for broadband services – would not necessarily result in clear economic benefits.

He added: “Competition is good for everybody. And that goes for the last mile, too.”

swissinfo, Chris Lewis

telecoms

Switzerland has the highest level of quality broadband connections in Europe.
The report says a typical Swiss monthly bill for a standard package of services came to SFr177 ($140) in 2002 – roughly average by European standards.
Prices have dropped by 25 per cent since 1998, and mobile price reductions account for 80 per cent of that drop.

In brief

The study concludes that Swiss customers enjoy the best-quality telecoms services in Europe.

It says the Swiss sector combines clearly superior infrastructure with middle-of-the-range prices.

However, price regulator Rudolf Strahm questions the assumptions underlying the findings on price levels – particularly in the mobile telecoms area.