Executive Summary
Swisscom, Switzerland’s dominant telecommunications provider with 51% state ownership, presents a troubling pattern of catastrophic foreign investments, criminal entanglements, competition law violations, and questionable governance spanning three decades. Swiss taxpayers, as majority shareholders, have ultimately borne the costs of management failures totalling well over 10 billion francs.
1. The Foreign Investment Disaster Trail
Debitel: 3.3 Billion Francs Down the Drain
In 1999, Swisscom paid 4.3 billion francs to acquire Debitel, Germany’s third-largest mobile services provider, with ambitions to enter the German UMTS market. Five years later, they sold it for approximately 1 billion francs to Permira, crystallising a loss of 3.3 billion francs.
The debacle became politically explosive. The parliamentary Finance Delegation was tasked with investigating, and Nationalrat Pierre Kohler calculated that the Swiss Confederation lost approximately 2 billion francs on this single investment.
Earlier Failures: Hungary, India, Malaysia
Between 1993 and 1997, Swisscom (then Telecom PTT) invested 2 billion francs in ventures across Hungary, India, Malaysia, and Baden-Württemberg (Tesion), plus the pan-European Unisource consortium. The investments proved loss-making, and Swisscom exited in 1999. The bitter irony: companies in Malaysia and India were later sold by their new owners at multiples of what Swisscom received.
Fastweb: From Acquisition to ‘Ndrangheta
In 2007, Swisscom acquired Italian broadband provider Fastweb for 6.9 billion francs. In December 2011, Swisscom was forced to write down 1.3 billion euros due to massive value impairment, described by critics as another “billion-franc grave.”
2. The Mafia Money Laundering Scandal
The Fastweb acquisition embroiled Swisscom in what Italian prosecutors called “one of the most colossal fraud cases in Italian history.”
Between 2003 and 2006, Fastweb and Telecom Italia subsidiary Sparkle were allegedly used to launder approximately 2 billion euros of ‘Ndrangheta mafia money through fictitious international telephone service transactions. The scheme also defrauded the Italian treasury of 360 million euros in VAT.
Swisscom’s Foreknowledge
Swisscom admitted it knew about ongoing tax fraud investigations when it acquired Fastweb in 2007. However, the company claimed it was blindsided by the money laundering dimension. This defence strains credibility given the scale of the operations.
Criminal Proceedings
Fifty-six arrest warrants were issued, including for Fastweb founder Silvio Scaglia (who became a billionaire from selling to Swisscom), former board members, and even an Italian senator from Berlusconi’s party who was photographed embracing an ‘Ndrangheta boss.
Swiss authorities executed house searches in Ticino and Geneva as part of international cooperation.
To prevent the Italian authorities from placing Fastweb under state administration—described by Fastweb’s CEO as “equivalent to murdering the company”—Swisscom CEO Carsten Schloter personally took over as Fastweb chief.
Swisscom had to set aside 70 million euros for potential liabilities.
3. Competition Law Violations and Massive Fines
The 186-Million-Franc ADSL Fine
In 2009, the Competition Commission (Weko) found that Swisscom abused its dominant market position from 2001 to 2007 by charging competitors excessive wholesale prices for ADSL services—creating a “cost-price scissors” that made it impossible for rivals to operate profitably. The initial fine was 220 million francs.
After a decade of legal battles through the Federal Administrative Court and finally the Federal Supreme Court in December 2019, the fine was confirmed at 186 million francs.
The Supreme Court found Swisscom’s behaviour “at minimum negligent” and a clear violation of cartel law. Swisscom’s defence that cable networks provided competitive pressure was rejected.
Following the verdict, Sunrise sued Swisscom for 350 million francs in damages.
The Post Network Abuse
In 2015, Weko fined Swisscom 7.9 million francs for abuse of market dominance in a 2008 tender for connecting Swiss Post locations. Swisscom won the contract by underbidding competitors by 30%, while charging those same competitors wholesale prices that made competitive bids impossible.
Ongoing Antitrust Battles
In 2021, three internet providers (Init7, SolNet, Ticinocom) filed complaints with Weko, alleging Swisscom’s retail prices were so low that competitors buying Swisscom wholesale services couldn’t cover their costs—another “price scissors” allegation.
As early as 2003, Weko had to intervene when Swisscom tried to monopolise the ADSL market through discriminatory volume discounts to its subsidiary Bluewin.
4. The 800,000-Customer Data Breach
The Incident
In autumn 2017, criminals exploited access credentials from a Swisscom sales partner to steal personal data (names, addresses, phone numbers, birthdates) of approximately 800,000 customers.
The data theft actually occurred via a marketing company in Tunisia—a subcontractor of a subcontractor—to which Swisscom’s partner had improperly passed login credentials.
Swisscom’s Response: Suppress and Minimise
Internal documents classified as “secret” reveal Swisscom initially intended to inform neither affected customers nor the public. Three months later, when forced to disclose, Swisscom characterised the stolen data as “not particularly worthy of protection.”
However, Swisscom’s own internal risk assessment, later obtained through freedom-of-information requests, listed eleven serious risks including: darknet trading of customer data, targeted SMS phishing, and “exposure of VIPs or endangered persons” with potential threats to “life and limb.”
Differential Treatment
While ordinary customers had to send an SMS to check if they were affected (and the system gave unreliable results), VIP customers including politicians were proactively notified.
Swisscom fought for two years to prevent release of the risk documents. The Federal Data Protection Commissioner concluded Swisscom “got lucky” that the anticipated harms largely didn’t materialise.
5. Serial Network Failures
2020: A Year of Outages
In 2020 alone, Swisscom suffered at least six major network failures affecting millions of customers. These weren’t minor glitches—emergency numbers 112, 117, 118, and 144 were repeatedly knocked offline across multiple cantons.
In the February 2020 outage, police and rescue services across Basel-Landschaft, Basel, Winterthur, St. Gallen, and other areas had to direct emergency calls through mobile alternatives. Even the government’s Alertswiss app failed.
The pattern was so alarming that the National Council’s Transport and Telecommunications Commission summoned Swisscom management for questioning. Bakom launched formal investigations. The Conference of Cantonal Police Directors declared it “disturbing for the population when emergency calls are impossible.”
Outages continued in 2021 and 2022, with Swisscom offering varying explanations: defective network components, unexpected software behaviour, security system adjustments.
6. Switzerland’s Most Expensive Telecoms
Systemic Overcharging
Studies by the Scientific Institute for Infrastructure and Communication Services (WIK) found Swiss consumers pay more for mobile, fixed-line, and internet than any other country in Europe. Swisscom’s broadband prices run roughly one-third higher than competitors—itself “a European record.”
Consumer publication K-Tipp calculated that “customers finance Swisscom’s foreign losses”—the company makes excess profits domestically, then squanders billions abroad.
While ex-monopolists in EU countries saw their market shares decline to around 40%, Swisscom has maintained roughly 60% across its markets—a dominance WIK attributes to regulatory favour and aggressive marketing that competitors cannot match.
Even as Swisscom raises prices (the “inOne mobile basic” subscription went from 45 to 50 francs in 2020), competitors offer unlimited data for 20-30 francs monthly. Swiss consumers pay approximately 100 francs monthly for combined services—significantly more than in Germany or Austria.
7. The Vodafone Italia Acquisition: History Repeating?
Stealthy Communication
Swisscom announced regulatory approval for its 8-billion-euro Vodafone Italia acquisition on Friday evening, December 20, 2024—when the country was focused on the PUK report on Credit Suisse’s collapse and EU bilateral negotiations. Transaction completion was announced January 2, when the Zurich stock exchange was closed for a holiday.
SVP Nationalrat Franz Grüter called it “almost mischievous”: “They definitely chose the date because they knew it would completely disappear.”
Debt and Downgrade
The acquisition was entirely debt-financed, increasing Swisscom’s net debt by 9.1 billion francs to 15.6 billion francs—almost 2,000 francs per Swiss resident. Moody’s subsequently downgraded Swisscom’s credit rating, noting that debt would exceed government-mandated limits for an extended period.
“Italian Air”
Analysis of Swisscom’s 2024 annual report reveals that over 75% of the 7.4 billion franc purchase price represents goodwill and intangible assets—”Italian air” in the words of financial analysts. Goodwill alone accounts for 1.1 billion francs; licenses 2 billion; and “brand and customer relationships” 1.7 billion.
Political Silence
Remarkably, this acquisition faced virtually no political opposition—unlike the blocked 2005 Eircom bid for just 4.6 billion francs. Critics argue the timing was designed to avoid scrutiny, and the state’s representative on Swisscom’s board approved the deal without public debate.
8. Offshoring Swiss Jobs While Profitable
The Pattern
In September 2025, reports emerged that Swisscom plans to relocate hundreds of IT development jobs from Switzerland to its centres in Riga (Latvia) and Rotterdam (Netherlands), where salaries for senior engineers are 65,000-75,000 francs versus up to 140,000 in Switzerland.
When Swisscom opened these foreign offices in 2019-2020, management explicitly stated they would “not come at the expense of Swiss jobs.” Now the company cites “continuous cost optimisation” for the offshoring.
Union Syndicom reports that employees over 50 particularly fear for their positions. Despite good financial results, Swisscom continues cutting Swiss positions while staff abroad has grown nearly 50% from 2,689 to 3,982 over five years.
Dubious Sales Practices
In May 2025, employees in Swisscom shops in the Vaud-Valais-Fribourg region revealed questionable practices: illegal recording of customer conversations without consent, manipulating contracts to meet sales targets, and selling youth subscriptions to elderly customers who didn’t qualify.
9. Governance Questions
The CEO’s Death
In July 2013, CEO Carsten Schloter was found dead at his home in an apparent suicide at age 49. In one of his last interviews, he described himself as “a victim of modern communication,” finding it “increasingly difficult to unwind.” The death came as Weko opened an investigation into ADSL practices, though his suicide note reportedly cited personal reasons.
State-Owned Hybrid
Critics describe Swisscom as an “unspeakable hybrid”—formally organised under private law but majority state-owned, meaning Swiss taxpayers bear business risks while management operates like a private company seeking profit maximisation.
The Federal Council’s interest in further market liberalisation appears limited given its ownership stake, creating a conflict between its roles as regulator and beneficiary of monopoly profits.
Conclusion: Pattern of Accountability Failure
The record reveals systemic problems:
- Repeated billion-franc foreign investment losses (Debitel, early Asian ventures, Fastweb write-downs)
- Criminal entanglements that management claims surprised them despite due diligence
- Serial competition law violations requiring decade-long litigation
- Chronic disregard for customer data security and transparency
- Critical infrastructure failures affecting emergency services
- Monopoly pricing that Swiss consumers have no means to escape
- Job offshoring despite strong profits and state ownership
Swiss taxpayers, through their government’s 51% stake, remain exposed to further misadventures. The near-silence surrounding the 8-billion-euro Vodafone Italia acquisition—debt-financed, mostly representing intangible assets, announced when nobody was watching—suggests lessons remain unlearned.
The question isn’t whether Swisscom will face another crisis. It’s when—and how many more billions Swiss citizens will lose before meaningful governance reform occurs.
Sources: swissinfo.ch, NZZ, Tages-Anzeiger, 20 Minuten, Handelszeitung, Bilanz, watson.ch, SRF, Basler Zeitung, inside-it.ch, court records and regulatory filings.