Swisscom dismantles hierarchy in bid to become more flexible

The board of Swisscom has announced sweeping changes to the way the company is run. The directors said they intended to transform the group into a series of independent operating companies by the end of next year.

A statement on Friday said the executive board, which currently manages the entire company, would be replaced by largely autonomous management structures in the operational units, leaving the board free to concentrate on financial and strategic matters.

It added that the restructuring would allow for clear allocation of responsibility for results, and would allow the companies to focus on their core markets. It said this would increase transparency and make the companies more attractive to new capital and personnel.

The board of directors also approved a strategy of focusing its holdings on mobile communications, which it called “the market of the future”. “A decision was taken to hive off the Mobile Com division into a stock corporation,” the statement said.

As part of the restructuring, Swisscom will sell its 50 per cent stake in the German joint venture “tesion” to its partner, Energie Baden-Württemberg. It also plans to sell its 50 per cent stake in Estel in France.

Analysts say that by making its operational units more independent Swisscom will find it easier to enter into industrial alliances. They say the company’s ability to make deals with other firms is hampered by current Swiss law, which stipulates that the state must hold a majority stake. The government currently owns 65.5 per cent of Swisscom.

They added that by making its operational units more independent it would make it easier for Swisscom to enter alliances without the state having to give up its majority.

swissinfo with agencies