Swisscom Fined CHF 18 mn by COMCO for Unlawful Conduct in Fibre Expansion

Telecommunications giant Swisscom is facing a fine of CHF 18 million by the Competition Commission (COMCO) for unlawful conduct in its expansion of the optical fibre network.
Optical fiber investmentCOMCO’s ruling specifies that Swisscom’s expansion should adhere strictly to a point-to-point (P2P) topology, significantly altering the company’s approach and potentially impacting both time and costs, particularly in rural areas.

Swisscom, however, remains adamant in its stance, finding COMCO’s decision incomprehensible. The telecommunications provider argues that its adoption of a point-to-multipoint (P2MP) topology since 2020 was the most suitable choice.

Contrary to COMCO’s assertions, Swisscom maintains that all competitors would have had access to data streams on non-discriminatory terms, enabling them to offer a wide range of services, including telephony, internet, and TV.

According to Swisscom, the P2MP architecture represents the most efficient and cost-effective method for rolling out Fibre to the Home (FTTH) in Switzerland. Moreover, Swisscom highlights that P2MP topology is widely accepted across EU states and complies with anti-trust laws, as recognized by regulatory bodies. Thus, Swisscom defends its actions as fair under competition legislation.

However, in response to COMCO’s ruling, Swisscom has announced plans to comply by reverting to the P2P architecture, which will involve converting existing P2MP connections and installing new fibre connections.

This shift is expected to lead to a more challenging expansion process, involving additional civil engineering work and resulting in delays, particularly affecting rural communities. Consequently, Swisscom anticipates that by 2030, up to 10 percent fewer households will have access to optical fibre, with the FTTH expansion being completed several years later than initially planned.

Despite the setback, Swisscom assures stakeholders that its financial outlook for the 2024 financial year remains unchanged, as the company had factored COMCO’s ruling into its planning and made necessary provisions. However, Swisscom reserves the right to appeal COMCO’s decision before the Federal Administrative Court.

COMCO’s investigation into Swisscom’s fibre expansion practices has been ongoing since December 2020. During this period, precautionary measures were implemented, restricting Swisscom from operationalizing and marketing P2MP connections, except in exceptional cases. Although Swisscom challenged these measures, the Federal Court upheld COMCO’s decision in a judgment issued on November 29, 2022.