The last mile of in-house telephone connections will once again be significantly cheaper for Swisscom's competitors. The Communications Commission (Comcom) has lowered the price of the last mile to CHF 18.18 per month and line 18 months after it was opened up by the legislator. This is now significantly lower than the prices of CHF 31 in 2007 and CHF 23.50 in 2008 last demanded by the owner Swisscom.
Competitors on the telecoms market such as Sunrise and Orange, which have filed several complaints against Swisscom in the past, see themselves vindicated by Comcom. "The decision shows once again that Swisscom is trying to achieve excessive prices through miscalculations," reads a statement from Sunrise. The company pays tribute to Comcom for having "taken a groundbreaking decision on the price of the local loop in the direction of fair competition against all resistance from the former monopolist."
Nevertheless, the company is insisting on further liberalization steps. From Sunrise's point of view, it is regrettable that Comcom did not follow the recommendation of the price supervisor regarding the calculation method for pricing. Due to the overvaluation of the largely depreciated infrastructure, Swisscom can still claim costs which it does not actually incur and pass these on to its competitors. The company writes that there is still a need for political action on this point.
Swisscom wants to study the decision in detail before commenting on it. Apparently, the company does not have the ordinances that normally accompany the notifications, which contain the reasons. As a result, Swisscom is unable to provide a detailed statement, according to a press release issued on Wednesday. Nevertheless, it writes: "Provided the rulings and their justification remain within the framework of the law, Swisscom will accept the decisions and refrain from appealing to the next instance."
The telecoms giant also argues that the price calculations are based on the benchmark values approved by Comcom and the Federal Court in previous proceedings. Despite high production costs, Switzerland is already one of the countries with the lowest regulated telecommunications prices in Europe in important areas. In addition, the company believes that the price comparisons and requirements of the authorities do not adequately take into account the demands made in terms of quality, basic service and job opportunities.
The extent to which the price reduction will affect end customers is still unclear. "The market is now becoming more flexible and dynamic," said Michael Burkhardt, Director of Public Relations at Sunrise, when asked by SDA. Sunrise has already anticipated ComCom's decision to some extent and has therefore designed its products favorably (see:
Sunrise campaign for the conversion of the last mile). However, it is still too early to announce further price reductions.
According to Comcom, the price reductions are intended to stimulate the market. Setting the unbundling price improves legal certainty. Companies can now plan their investments. Customers, in turn, will benefit from a wider range of offers at lower prices. Comcom has also decided to reduce the prices for co-location and interconnection by 25 to 30 percent. This refers to the shared use of Swisscom systems and the Swisscom fixed network by competitors. This means that they are now among the cheapest in Europe, as the authority writes.
Comcom issued its price ruling on the basis of extensive cost analyses and price calculations carried out by the Federal Office of Communications (OFCOM). The analysis revealed that Swisscom was charging too high capital costs, in some cases too short depreciation periods and also excessive construction and operating costs.