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Swisscom considers flotation to keep head above water

The country's largest telecommunications operator, Swisscom, is considering a flotation of its mobile network to finance future growth.

The country's largest telecommunications operator, Swisscom, is considering a flotation of its mobile network to finance future growth.

The move, announced at a news conference in Zurich, appears to be a U-turn forced on the company by spiralling costs for the third generation of mobile phone networks or UMTS.

Bids for such licences in Britain have reached around SFr40 billion. Swisscom plans to seek UMTS licences in Switzerland and, through its subsidiary Debitel, in Germany.

"We see by the British example that to obtain a UMTS licence we need considerable funds," says Swisscom chief executive officer, Jens Alder, "the flotation of our mobile phone network could be one way of raising them but no firm decision has been taken."

Swisscom is also calling on the federal government to give it more room for manoeuvre in a rapidly consolidating sector.

The chairman of the board, Markus Rauh, said the government should scrap the Telecommunications Companies Act that enshrines the state's majority stake in Swisscom.

He said that the chances of Swisscom surviving in the long-term as an independent company were slim and that it had to be free to seek partners in the future.

"Only the status of a publicly listed company gives us the necessary room for manoeuvre to assure the future of the company in a market which shows an astonishing development," said Rauh.

The government currently owns a 65 per cent stake in the company.

Alder said Swisscom will continue its restructuring programme to remain competitive and added that the recent announcement of 3,000 job losses was a painful but necessary part of the process.

As well as the three thousand job cuts, a similar number are to taken off Swisscom's payroll by a series of outsourcing deals.

The government and unions have called on Swisscom to avoid mass redundancies but there was no more news on how the company plans to do this.

Alder says only that discussions between Swisscom and its social partners are continuing.


By Michael Hollingdale

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