5 Provisions

In CHF million
and restora-
tion costs
and compentition
law proceedings


Balance at 31 December 2015   593   310   236   1,139
Additions of provisions   1   2   13   16
Present-value adjustments   101   1   1   103
Release of unused provisions   (105)     (3)   (108)
Use of provisions   (1)   (186)   (16)   (203)
Balance at 30 June 2016   589   127   231   947
Thereof current provisions     9   147   156
Thereof non-current provisions   589   118   84   791

Provisions for dismantling and restoration costs

The provisions for dismantling and restoration costs relate to the dismantling of mobile base stations and transmitter stations of Swisscom Broadcast and the restoration to its original state of the land owned by third parties on which the stations are located. The provisions are computed by reference to estimates of future dismantling costs and are discounted using an average interest rate of 0.81%. The decrease in the discount rate had an effect of CHF 97 million in the first half of 2016. Furthermore, the cost index for the calculation of the dismantling costs fell in the first half of 2016, which had an effect of CHF 105 million. Adjustments as a result of reassessments in the net amount of CHF 4 million were recognised under property, plant and equipment in the first half of 2016. The non-current portion of the provisions is expected to be settled after 2020.

Provisions for regulatory and competition-law proceedings

In accordance with the revised Telecommunications Act, Swisscom provides interconnection services and other access services to other telecommunication service providers in Switzerland. In previous years, several telecommunication service providers demanded from the Federal Communications Commission (ComCom) a reduction in the prices charged to them by Swisscom. Based on legal assessments, Swisscom raised provisions in prior years. The provisions recognised in the consolidated financial statements 2015 have not changed materially during the current financial year.

In 2009, the Competition Commission (ComCom) sanctioned Swisscom for abuse of a market-­dominant position in the case of ADSL services in the period up to the end of 2007 and levied a fine of CHF 220 million. Swisscom appealed the ruling to the Federal Administrative Court. In ­October 2015, the Federal Administrative Court confirmed in principle the Competition Commission’s decision and reduced the penalty imposed by the Competition Commission from CHF 220 million to CHF 186 million. As a result of this decision, Swisscom recognised a provision of CHF 186 million in the third quarter of 2015. Swisscom does not consider the sanction justified and has lodged an appeal with the Federal Court. At the beginning of 2016 Swisscom paid the penalty of CHF 186 million, as no suspensive effect was granted.

Other provisions

Other provisions mainly include provisions for workforce reductions and environmental, contractual and tax risks. The other provisions recognised in the consolidated financial statements 2015 have not changed materially during the current financial year.