Jens Alder, CEO of leading Swiss telecommunications firm Swisscom, is to be replaced with immediate effect by the head of Swisscom Mobile, Carsten Schloter.This content was published on January 20, 2006 - 12:37
Alder's resignation comes as Swisscom battles with the government - its majority shareholder - over the firm's future strategy.
Swisscom was instructed at the end of last year by the Swiss government not to make any significant acquisitions outside the country while plans were made to sell off the state's stake in the firm.
In a statement released on Friday, Swisscom said it took "in principle a positive view of the plans", but reiterated that it "must penetrate new business fields and acquire stakes as well as forge alliances at home and abroad".
"Swisscom has to rely on a shareholder base that takes the long view and is prepared to accept the associated corporate risks," the company added.
The former state monopoly has been at odds with its main shareholder ever since the cabinet announced the freeze on foreign acquisitions.
Alder said he was stepping down because the government had decided to introduce a "different strategy... to the one I personally spent years developing".
"Following this decision it is now better for the company if another face develops and represents this new strategy," he added.
Commenting on Alder's six-year tenure as CEO, chairman Markus Rauh said he had "achieved the extraordinary for Swisscom in a turbulent time".
Schloter – a 42-year-old German national – joined Swisscom in 2000 as the head of the firm's mobile-communications division.
Last November Swisscom was in advanced takeover talks with Ireland's former state telecoms monopoly Eircom, when the government suddenly announced that it intended to sell its stake in the company, worth some SFr17 billion ($13.27 billion).
The following day, ministers said Swisscom would no longer be permitted to make foreign acquisitions, a dramatic statement which effectively called off the Eircom deal overnight.
Shares in Swisscom nosedived, while company executives were forced to admit that they had been caught unawares by the announcement.
At the time Alder said he and his executive board had lost credibility with foreign partners and warned that the firm's reputation abroad was likely to suffer irreparable damage.
The government clarified its position a week later, saying that the ban on acquisitions only related to fixed-line operators.
In its statement on Friday, Swisscom said it welcomed "any sale of the federal majority" but expected "rapid clarification of the political question".
"At the international level, the process of consolidation in the telecoms sector is set to accelerate... Growth opportunities are being evaluated abroad."
Financial markets welcomed Alder's resignation and Schloter's appointment.
In trading on the Zurich stock exchange Swisscom shares gained 0.7 per cent to close at SFr397.25.
"In general, markets don't like instability, so putting an end to this chapter and proposing Schloter, who is a very charismatic and capable person as the new CEO, is definitely seen as positive," Panagiotis Spiliopoulos, an analyst at Bank Vontobel, told swissinfo.
Spiliopoulos said Swisscom's strategy under Alder to make foreign acquisitions was not "flawed", but that the Swiss government had the right as the majority shareholder to "secure its investment".
swissinfo with agencies
Jens Alder joined Swisscom in 1998 and was appointed CEO in December 1999.
He stepped down on Friday and will be replaced with immediate effect by Carsten Schloter, currently CEO of Swisscom Mobile.
Alder will receive a payoff of SFr1.54 million ($1.2 million), comprising a year's salary and bonus.
Swisscom is at odds with the government - which holds a majority stake in the firm - over the telecom giant's future strategy.
At the end of 2004, Swisscom had a 61% share of the market. It was followed by sunrise (21.3%) and Orange (17.7%).
The state currently holds 66 per cent of Swisscom, representing a market value of SFr17 billion.
There are almost 64,000 other shareholders, the vast majority in Switzerland. Of these, 12 shareholders hold more than 100,000 shares.
The German government owns 37% of Deutsche Telekom. The French government owns 33% of France Telecom.
This article was automatically imported from our old content management system. If you see any display errors, please let us know: firstname.lastname@example.org