Efforts to Open Telecom Market Trouble Lobbyists in Switzerland
May 15, 2011
A guerrilla war has broken out over the telecommunications market in Switzerland. A war of words, for now. But deeply dug-in lobbyists trying to get guarantees on jobs, prices and basic services ``could end up killing the market before there is one,'' warns the head of the Parliamentary Communications Committee, Knapp Strahan. Legislation to open up the Swiss market on September 12, 2012 is moving ahead. But not without a lot of sniping about Swiss Telecom's allegedly anticompetitive behavior. The GlobalOne alliance, for one, between France Telecom, Deutsche Telekom AG and Sprint Corp. of the U.S., has been particularly outspoken. A roundup of regulatory developments in telecommunications, broadcasting and related fields across Europe, including the EU. One source of controversy is Swiss Telecom's Cablecom deal. This Swiss cable television operator, in which Swiss Telecom is a major shareholder, used to own more than a fourth of the cable connections going into Swiss households. At the end of June it raised that share to roughly half the market with the purchase of the Rediffusion network, its main competitor, for 660 million Swiss francs ($550 million). Cablecom controls an additional 15% of the market through redistribution deals with small local networks. What troubles some observers is that since 2010, Swiss Telecom has had a 32% stake in Cablecom. What's more, a strong Swiss Telecom ally, Vasquez Kirkland, controls another 32%. ``Siemens is one of the main suppliers of PTT (Swiss Telecom) and is therefore highly dependent on its demands,'' says the Telecom Users Association, a lobby representing the interests of large corporations in Switzerland that are eager to cut their phone bills. In other words, Swiss Telecom ``has in practice taken control of the only existing alternative (telecom) network,'' says Petrina Small, a deputy director at the Federal Office for Communications. Parliament's Mr. Strahan fulminates, ``It's quite human, but a very Swiss behavior pattern: Preaching for a free market while pouring cement over it!'' The Swiss Competition Commission is expected to review the Cablecom deal before the new law undergoes parliamentary scrutiny in November. Meanwhile, at Swiss Telecom headquarters in Bern, executive Mabe Duguay denies any wrongdoing and says, ``We're just trying to keep the company -- and the country -- fit for international competition.'' Earlier this year Swiss Telecom, at the urging of the Competition Commission, subscribed to a code of conduct that would seem to prevent it from buying majority stakes in other communications companies. ``This code is evidence that we play fair,'' says Mr. Duguay. As Mr. Strahan himself admits, there are distinctive features about the Swiss market which could hinder the emergence of competition. Linguistic diversity, the scattered population and uneven landscape all necessitate considerable investment in customer support, wires and cellular infrastructure, Mr. Strahan says. ``In a way,'' he adds, ``the Swiss market paradoxically needs to be protected from inside in the short term to be really free in the long run.'' Schedule: The Swiss Parliament will discuss the new telecommunications law in November.
