| Information Technology in
Switzerland |
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| Information Technology in
Switzerland |
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SwissCom
The previously existing Swiss PTT supplied the country with national and international services with investments in local and long distance networks, international carriers, ISDN, mobile communications, radio paging and satellite systems. The Swiss Federal Council passed legislation in 1997 to fully liberalize the market by January 1, 1998, the European Union deadline for liberalization. Switzerland is not a part of the European Union, but has set similar guidelines. In 1998 the PTT was divided into two entities: "Die Post" Postal Services and Swiss Telecom. (15)
The current deregulation of the Swiss Telecom PTT, to the new SwissCom, has changed it from a technology-oriented company to a market-oriented company. SwissCom will remain the major player while estimated market loss for the first five years is 15%. The overall market however, is expected to grow 4% per year. SwissCom's success can be attributed to good customer care and high quality services. (16)
On October 5, 1998, SwissCom had the largest Initial Public Offering (IPO) in Switzerland ever and the largest in Europe this year. Over 420,000 residents subscribed to the IPO. Shares were offered at SFr. 340 and rose to SFr. 380 by the end of the day. SwissCom stock is quoted on the New York Stock Exchange (NYSE) and the Swiss Stock Exchange (SX). (17) SwissCom initially sold 30% of its stake to the Swiss public. At a later date offerings will be held for institutional investors first in the UK, then in the US and finally to the rest of the world. The Swiss government will maintain 51% control of SwissCom. SwissCom's new stock will be included in major Swiss market indices, such as the Swiss Market Index (SMI), and therefore will be an important addition to major portfolios. (18)
Cellular
Bakom, The Swiss Office of Federal Communications made the decision to liberalize the GSM cellular market in 1997. The GSM market, however is still limited due to the NMT900 (Nordic Mobile Telecommunications 900 MHZ) which is occupying much of the band space. SwissCom has heavily invested in the NMT system and for the time being will remain in the market. NMT900 is scheduled to be eliminated in the year 2001. In April, two new licenses were awarded to DIAX AG and Orange Communications. Other bidders for the contracts that lost were Fortel, Sunrise and Unlimitel. (19)
Cable Television
CableCom is the largest Cable TV provider in Switzerland. On December 17, 1997, the Federal Council decided that SwissCom would be allowed to maintain is 32% stake in CableCom which has some concerned about limitations of competition. In February 1997, an official request was to force SwissCom to release its shares in CableCom was made by the Swiss Competition Commission. The battle was waged with regard to the last mile dilemma. CableCom is the only other company beside SwissCom to have widespread access to the majority of Swiss households. SwissCom interconnection charges have been identified as the highest in the world. Reasons for the decision include the fear of a foreign takeover since 32% of CableCom is owned by Veba and the other 32% by Siemens. CableCom does plan to compete against SwissCom as an ISP. (20)
New private TV channels include Presse TV, Star TV, Top TV, SAT1, Tele 24, Prime Tv, RTL/ProSieben and TV3. The growing market for television advertising has caused the increase in private television channels. (21)
Hardware and Software
The hardware and software industry is almost entirely deregulated due to the lack of a domestic market. Regulation generally pertains to safety issues.
Bakom/OfKom & KomKom
The Swiss telecommunications regulatory and policy-making bodies are Bakom/Ofkom and KomKom.
Bakom/Ofkom, the Swiss Office for Telecommunications in Biel, has been the licensing, certification and policy-making agency since 1992. It will the role of creating a framework for the free telecommunications market in Switzerland. (22)
As of January 1, 1998, KomKom, the Swiss Communications Commission will be regulating the newly liberalized market. January 1, 1998, was the target date set by the European Union for liberalization. Although Switzerland is not a member nation of the European Union, it complies with many of the Union's objectives to ensure future commercial and economic prosperity.
The KomKom panel is appointed by the Federal Council, the executive branch of the Swiss government. The panel consists of seven telecommunications experts.
Interconnection Charges
The Bakom recently conducted a survey showing
that SwissCom has the highest interconnection charges of ten countries.
Included in the survey are the US, the UK, Denmark, Sweden, France, Germany,
Belgium, the Netherlands and Spain. Bakom conducted the survey after
concerns of potentially unfair connect fees. Bakom recommended charges
that will eventually by set by KomKom. Current SwissCom charges are
SFr. 0.0625 ($.043) per minute for regional calls and SFR. 0.0888 ($.061)
for national calls. This is three time higher than the average in
countries surveyed. Bakom recommended a charge of SFr. 0.0214 ($.015)
and also requested SwissCom to justify higher rates. It is expected that
KomKom will set low rates to ensure that high charges will not hinder competition.
The European Union recommended rates of SFr. 0.017 ($.011) for regional
calls and SFr. 0.0326 ($.022) for national calls. Although Switzerland
is not a part of the European Union, it is preparing itself for economic
union and greater competition. (24)
Telecommunication
Infrastructure
Internet Activity 
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Email: ml8359a@american.edu
Last updated: December 18, 1998