Swisscom to enter joint venture with Belgacom

The joint venture affects Swisscom's international carrier business Keystone

Switzerland’s leading telecommunications company, Swisscom, and Belgian counterpart Belgacom are to combine their international carrier business.

Swisscom Fixnet will hold 28 per cent of the shares – but around 100 jobs are expected to be lost in Switzerland as a result of the move.

Belgacom will hold the remaining 72 per cent in the firm, which is to be headquartered in Belgium. There will be a satellite office in Switzerland.

The two companies said on Wednesday that the move would enable the newly created company to reinforce its market position and competitiveness in the international carrier market.

The wholesale or international carrier business involves providing wholesale services to other telecom operators to carry voice calls.

“The joint venture is expected to be cash-flow positive for both shareholders as from completion,” said a statement issued on behalf of the two companies.

Around 100 out of 124 jobs in Switzerland will be cut over the next three years. No posts will be affected at Belgacom.

Welcomed

Swisscom said that the joint venture strengthened the competitiveness of the Swisscom group while allowing Swisscom Fixnet to continue its focus on its core national network and wholesale business.

“Due to the joint venture’s enhanced purchasing power, Swisscom group companies will be obtain better prices for termination in foreign companies while maintaining the high quality standard for which Swisscom is universally renowned,” said Christoph Brand, head of Swisscom Fixnet Wholesale.

Belgacom has been looking for a partner to grow its wholesale business, which is known for its narrow profit margins, and had made the business a separate entity in preparation.

The company currently ranks 11th in the world in the business in terms of traffic and has networks in Europe’s major cities and cables under the sea.

Swisscom pulled out of the business in the United States and several European countries in 2003 due to fierce competition.

swissinfo with agencies

Key facts

Swisscom Fixnet is part of the Swisscom Group, the biggest Swiss telecoms provider.
It covers the entire national and international fixed-network telephony business, including network infrastructure and wholesale.
It has 7,700 employees.
In 2003, Swisscom as a whole made a net profit of SFr1.57 billion ($1.35 billion) on turnover of SFr14.58 billion.