Parliament divided over Swisscom privatisation

Swisscom's revenues for the first three quarters of 2005 were SFr7.2 billion Keystone

The political parties have reinforced their positions on the future of Swisscom, with clear lines drawn for and against privatisation.

The government came in for harsh criticism in parliament during the debate on its plans to fully privatise the telecoms firm.

The centre-right Christian Democrats will oppose the sale of the government’s 66.1 per cent stake, its president Doris Leuthard said.

The Social Democrats have adopted the same position, promising to force a referendum if the government persists in its plans to privatise Swisscom.

But the centre-right Radical Party and the rightwing People’s Party argued in favour of the state off-loading its shares.

Finance minister Hans-Rudolf Merz said the government would produce its short-term strategy for Swisscom shortly.

The pro-privatisation parties pointed out that the guarantee of universal service did not depend on the participation of the state in the telecoms company, but on the law.

The parties of the left think otherwise, convinced that privatisation would ultimately lead to Swisscom falling into foreign ownership.

Communications failure

All parties, with the exception of the People’s Party, criticised the government’s handling of communications during the Swisscom affair.

Christoph Mörgeli of the People’s Party said it was right to rein in Swisscom, adding that the sooner the company was sold, the better.

The Senate discussed the same issue on Tuesday, with some speakers accusing the cabinet of acting in a cavalier fashion.

“In three weeks, the decisions and the information of the cabinet damaged the reputation of the government, tarnishing its image in Switzerland and abroad, Alain Berset of the Social Democrats complained.

Swisscom was in advanced takeover talks with Ireland’s former state telecoms monopoly Eircom, when the government announced that it intended to sell its stake in the company, worth some SFr17 billion ($13.27 billion).

The following day, the government announced that Swisscom was not permitted to make foreign acquisitions, effectively calling off the Eircom deal.

The government clarified its position a week later, saying that the ban on acquisitions only related to fixed-line operators.

swisscom with agencies

Key facts

On November 23 the government announced that it wanted to sell its entire 66% share in Swisscom.
The following day it became known that the government had forbidden Swisscom to make any acquisitions abroad.
Through this decision, a deal to purchase the Irish operator Eircom was shelved at the last minute and SFr1.5 billion was wiped off the value of Swisscom shares.
On December 2 the government clarified its ban on foreign acquisitions, saying it only related to fixed-line operators.