Home Latin America III 1998 Modern Times: Liberalisation of the Swiss Telecoms Market

Modern Times: Liberalisation of the Swiss Telecoms Market

by david.nunes
Peter FischerIssue:Latin America III 1998
Article no.:13
Topic:Modern Times: Liberalisation of the Swiss Telecoms Market
Author:Peter Fischer
Title:Deputy Director
Organisation:Swiss Federal Office for Communications (OFCOM)
PDF size:20KB

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Article abstract

Connect-World is delighted to showcase Switzerland, a country where its households possess more personal computers than even the US. Here, Peter Fischer explains how Switzerland, with no mineral resources, plans to position itself as a communications hub. It is the strategy of the government to establish the country as a leading platform for all information, education and training in order to sustain into the future, the image of a highly-qualified population as the basis for the service economy.

Full Article

Switzerland sits in the heart of Western Europe, landlocked by France, Germany, Liechtenstein, Austria and Italy. The Alps occupy the central and southern regions of the country and the modest Jura Mountains straddle the border with France in the north-east. The federal capital of Switzerland is the picturesque city of Bern, located close to the centre of Switzerland. The largest city in the country is Zurich, an international financial centre. Geneva, sitting on lake-side shores, in the western tip of the country, is the largest city in the French-speaking area. It is home to the United Nations, the World Trade Organisation, the World Health Organisation, the International Committee of the Red Cross and many other international organisations. Over 60% of the country is mountainous and a quarter of it is covered in forests. Graubunden, land of 150 valleys, is the largest canton (state) in Switzerland and is mostly an alpine region with some of the top mountain resorts, including St. Moritz, Davos, and Klosters. Since Switzerland has no mineral resources, it must import, process and resell them as products. “Services” are the most important part of the economy. This includes banking, assurances and tourism. Main export products are machines, chemical products (including pharmaceuticals), instruments and watches. Farming is also an important part of the economy. Switzerland is a linguistic melting pot with three official federal languages. German is spoken by approximately 66% of the population, French by 18% and Italian by 10%. A fourth language, Romansch, is spoken by 1 %, mainly in the canton of Graubunden. Communications Hub Through its policy of liberalisation, Switzerland is forging links with ongoing developments in the sphere of communications throughout the world; however, it is achieving this without giving up its own identity, culture or political system. Nevertheless, all these had to be redefined to match changing circumstances. Switzerland will continue to assert its position as a communications hub in the future. It can do this from a good international starting position, as it is one of the countries best equipped with New Information and Communications Technologies (NICT). For example, 41 % of households possess a personal computer compared with 37% in the US and 27% in Germany. Roughly 14% of the population is connected to the worldwide communications networks by Internet, either professionally or privately. Fixed telephony penetration is 62% of the population and 86% of households are connected to Cable Television (CATV). Compared with the rest of Europe, Switzerland, spending roughly US$1,130 (Sfr. 1,500) per head on NICT, is in first place in both absolute and relative terms. In addition to the industrial sector, major customers include the service sector, in particular, and banks, insurance companies, the media, commerce and tourism, as well as public bodies and government administrative offices. The parliament has recently passed the new Telecommunications Law which, as in most European Union countries, has paved the way for a complete opening-up of the telecommunications market from January 1st 1998. At the same time the reorganisation of the PTT operations has being pushed forward in order to equip the former state monopoly to compete in a market economy environment. Post and Telecommunications have been separated and a new company, Swisscom Inc. has been created taking over the commercial activities of the former telecommunication administration. In the autumn of 1998, an initial public offering of the shares is foreseen. The new legal framework has markedly improved Switzerland’s international competitive ability as an economic and communications location. An open telecommunications market ideally supplements the other well-known advantages of the country as an operating base: political stability, a high standard of training and education, consciousness of quality and cultural variety. All this offers rich perspectives to providers of communications services. They are able to equip their customers with powerful facilities and link them up inexpensively at any time they wish to their partners throughout the world. Rapid technological development is making this possible through groundbreaking innovations. The functional capabilities of systems are increasing. Transmission capacities are multiplying exponentially. New satellite systems such as Iridium or Global Star will also be operating in Switzerland. More Choices for Customers Furthermore, in the future customers will have more access to tailor-made, cost effective solutions to their communications problems. A wide variety of solutions offered by Swisscom, as well as by more than 100 private competitors are, of course, already available for business communications and private consumers. The opening up of the market has had a rapid effect on the sphere of mobile communications in particular. OFCOM has processed the tender for new mobile communications providers. Franchises were awarded in spring 1998. But in the area of international connections and online services, customers should be able to find interesting alternatives soon, as more than 150 telecommunications service providers and operators are already present in Switzerland. No Excuse for ‘Telecoms Deserts’ In this context it is important that the new telecommunications services should offer wide-area coverage and not merely be available in the conurbation. Considering, the technological possibilities, there is no longer any excuse for ‘telecommunications deserts’ and certainly not in a region with as small a surface area as Switzerland. It is the Government’s conscious aim to move the population towards being an information society. In order to set Swiss policy in this regard in a broader setting, a “Think Tank for an Information Society in Switzerland” was set up. Its final report puts forward interesting proposals as to how the challenges posed by information technology for society and the economy might be tackled. The range of services is one decisive element, but even more so is the willingness of the users to employ NICT. It is the strategy of the government to establish Switzerland as a leading platform for all information, education and training in order to sustain into the future the image of a highly-qualified population as the basis for the service economy. Conclusion In this respect the government will play an active role in creating the regulatory framework and in preparing the way for using the new means of communication. Action plans are already implemented with respect to training programmes, development of electronic commerce, information security, intellectual property right, convergence of broadcasting and telecommunications.

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