Swisscom report shows extent of splits over sale

The finance and communications ministers have come in for criticism Keystone

A parliamentary committee report into the cabinet's handling of the planned sale of Swisscom has revealed how deep political divisions are over privatisation.

The commission strongly criticised the cabinet saying the decision was badly prepared and went against its own rules.

The centre-right Radical Party said the report by a committee of the House of Representatives was one-sided and gave more ammunition to opponents of privatisation.

In a similar vein the rightwing Swiss People’s Party rejected the report, describing it as abusive.

For their part, the centre-left Social Democrats said the parliamentary report confirmed their concerns that the cabinet had taken a hasty decision which lacked a thorough assessment.

The centre-right Christian Democrats, who are also against a privatisation of Swisscom, criticised the government for giving in to pressure from the justice ministry.

In its report on Tuesday, the committee said the government had made an abrupt U-turn in its policy towards the state-owned telecoms operator.

Ban on acquisitions

It criticised particularly the cabinet’s decision last November to ban Swisscom from making any major acquisitions abroad – a move which led to the departure of its boss, Jens Alder.

At the time Swisscom had been bidding to take over the Irish telecoms company, Eircom, as part of an expansion strategy abroad.

In a first reaction, the cabinet rejected the criticism of the committee but admitted shortcomings of its information policy.

The federal authorities are the majority shareholders of Swisscom, currently holding a 62.5 per cent stake in the company.

The government earlier this month announced it was planning to sell its Swisscom shares, paving the way for the privatisation of the company.

Parliament is due to begin a debate on the issue in May.

swissinfo with agencies

In brief

Swisscom is the dominant player in the Swiss telecommunications market.

It had a monopoly until 1998.

The government announced on November 23 that it wanted to sell its majority stake. The following day it banned Swisscom from buying foreign companies, pulling the rug out from under a proposed takeover of Ireland’s Eircom.

But it later clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.

The finance ministry said in December that the government had a 62.45 per cent stake in the company.

Key facts

Financial year 2005
Revenue: SFr9.73 billion (-3.2% compared with 2004)
Net profit: SFr2.02 billion (+26.7%)
Mobile customers : 4.28 million (+9.5%)
Employees at the end of 2005: 1609(+4%)
Government stake in Swisscom: 62.45%