The Federal Court in Lausanne has ruled in favour of Swisscom keeping its monopoly on the telecoms network to households and other retail customers. The ruling overturns an earlier decision by the Federal Communications Commission (ComCom).
Last October, the telecommunications regulator ordered Swisscom, the country's largest telecommunications operator, to "unbundle" its final loop connecting subscribers with providers, known as the "last mile".
ComCom also ordered price cuts of up to 63 per cent on leased lines.
Swisscom had appealed to Switzerland's highest court over the ruling, saying it "disputed that interconnection also covered leased lines" and "appealed against arbitrary price-fixing in a competitive environment."
In a statement, Swisscom said its prices were competitive and in line with the European average and noted that ComCom's decision was based on 1998 prices, which had been reduced.
The telecommunications company argued that it currently faced competition from cable television operators and would soon from other operators.
Swisscom's rivals were quick to denounce Thursday's court decision.
The newly merged diAx/Sunrise, which had originally challenged the Swisscom monopoly, said the Swiss would continue to be subjected to higher prices and less innovation.
The Federal Court did not immediately give its reasons for Thursday's decision.
swissinfo with agencies