Swiss telecommunications firm Swisscom faces a SFr1.2 billion ($1.27 billion) net profit loss via Fastweb, its Italian broadband subsidiary.
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Swisscom, which invested €4.6 billion to buy Fastweb in 2007, posted a net profit of SFr1.8 billion in 2010.
“The difficult economic situation and increasing interest rates have led to reduced prospects for growth and a higher cost of capital in Italy,” Swisscom announced in a statement on Wednesday.
Swisscom said Fastweb’s book value had been impaired as a result, reducing its net income by SFr1.2 billion.
It noted that retail business was particularly slow, and that many of Fastweb’s customers failed to pay their invoices.
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Swisscom wants full control of troubled Fastweb
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Wednesday’s announcement by the Swiss telecommunications firm said it will buy all the outstanding shares in Fastweb – 17.9 per cent. Swisscom will pay €18 (SFr23.03) per share – a premium of 34.6 per cent on Tuesday’s closing price. The deal will cost it €256 million. Once it has acquired all the shares, it will…
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The probe into former and present Fastweb employees has already caused reputational damage to the firm, which could translate into serious business implications for mother company Swisscom. The international investigation has also focused on banks in Lugano, in the southern Swiss canton of Ticino. The financial centre has frequently been accused of hiding the assets…
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If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.