The federal government sets limits on Swisscom‘s expansion abroad. The company should focus on national security.
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More security – less debt: In its role as main shareholder, the Federal Council sets Swisscom’s strategic goals every four years. Now it was that time again. The federal government retains the majority shareholding of 51 percent and privatization is rejected. The Federal Council also wants the company to stabilize its debts. This means that further large takeovers abroad are ruled out for the time being. Instead, the federal government wants Swisscom to concentrate on the security of the national infrastructure.
Working at lofty heights, on a transmission tower. The infrastructure in Switzerland is the federal government’s first priority.
Swisscom
Expansion in Italy: Swisscom sparked a political debate last year. In March 2024, the telecommunications company announced the acquisition of Vodafone Italia for 8 billion euros. This makes Swisscom the second largest network operator in Italy. A number of politicians expressed their initial reaction worried. The risk is too great, for example if the federal company in Italy had to cut jobs. The government should sell the majority of shares. Things have now calmed down and privatization is off the table.
Swisscom makes almost half of its sales in Italy with Fastweb and the former Vodafone Italia.
Keysteone / KARL MATHIS
Swisscom half Italian: Swisscom no longer has much opportunity to grow in Switzerland, which is why it established itself in Italy 17 years ago. First with a stake in Fastweb and then in 2024 with the takeover of Vodafone Italia. Swisscom now has 20 million mobile phone connections in Italy, four times more than in Switzerland. When it comes to internet connections, there are also far more customer relationships in Italy than in Switzerland.
Debt doubled: The expansion in Italy was financed with loans. Swisscom’s debts have doubled within a year, to almost 16 billion francs. The Federal Council sets limits here. The new strategy paper states that debt should be a maximum of 2.4 times as high as EBITDA – also the operating profit before deducting interest, taxes, depreciation and amortization. Swisscom is currently only just within compliance with this limit. Another big takeover abroad like last year, with additional debts, is therefore ruled out until further notice. The Federal Council is setting stricter limits for Swisscom with the benchmark.
Focus on security: The reason why the Federal Council is refraining from privatization and maintaining control is based on national security. This is given even greater weight in the new strategy. “The review of the ownership strategy has shown that the majority stake in Swisscom is justified, particularly for security reasons,” the federal government said in a statement. Swisscom operates a critical infrastructure. A failure of the fixed and mobile networks and the Internet would have far-reaching consequences. “The Federal Council attaches more weight to this aspect in the strategic goals,” it continues. The Federal Council cites cybersecurity, telecommunications secrecy, data protection and the constant availability of emergency call centers as the main focus in operations.
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