Swisscom says SFr489m fine ‘unjustified’

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Swisscom vowed to fight the imposition of a SFr489m ($376m) fine being considered by Switzerland’s competition commission following its probe into mobile termination rates.

Switzerland’s leading telephone company on Monday described charges that it had overcharged competitors as “unjustified”, and said it reserved the right to lodge an appeal - if necessary with the Federal Court.

“Swisscom Mobile does not hold a dominant position in the Swiss mobile communications market, nor can it be accused of misuse,” the company said. However, it warned that provisions for the fine might have to be set aside from its 2006 net income.

It was responding to a draft partial ruling by the secretariat of the competition body which recommended that Swisscom Mobile pay a fine of about SFr489m for its alleged misuse of termination rates - the fees mobile network operators charge for routing calls from other operators into their networks - from April 1 2004 to May 31 2005.

The proposed ruling emerged as part of a long-running investigation into termination rates charged by Swisscom and its rival mobile carriers Sunrise, controlled by Denmark’s TDC, and France’s Orange. The probe, which is ongoing, found that only Swisscom Mobile, which following the period under review cut its rates by 40 per cent to SFr0.20 a minute misused its position by demanding “excessively high” termination fees.

The company, which will outline its arguments to the competition commission in May, claims to to have the lowest mobile termination rates of any Swiss mobile carrier, making net payments to its rivals because of its lower prices and higher outgoing call volumes.

Swisscom also argues that in a wider European context it does not have a dominant position and that its termination fees are within the continental average.

The company’s shares rose SFr1 to SFr425.25 in morning trade.

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