8 Provisions and contingent liabilities
Provisions
Provisions changed as follows in the first nine months of 2024:
In CHF million |
Dismantlement and restoration costs |
Regulatory and competition law proceedings |
Others |
Total |
||||
---|---|---|---|---|---|---|---|---|
Balance at 1 January 2024 | 866 | 200 | 197 | 1,263 | ||||
Additions to provisions | – | 10 | 9 | 19 | ||||
Adjustments recognised under property, plant and equipment | 50 | – | – | 50 | ||||
Interest and present-value adjustments | 7 | (11) | – | (4) | ||||
Release of unused provisions | – | (22) | (12) | (34) | ||||
Use of provisions | (15) | – | (28) | (43) | ||||
Business combinations | – | – | 1 | 1 | ||||
Foreign currency translation adjustments | – | – | 1 | 1 | ||||
Balance at 30 September 2024 | 908 | 177 | 168 | 1,253 | ||||
Thereof current provisions | – | 34 | 59 | 93 | ||||
Thereof non-current provisions | 908 | 143 | 109 | 1,160 |
In accordance with the Telecommunications Act, Swisscom provides access services (incl. interconnection) to other telecommunications service providers in Switzerland. In previous years, several telecommunications service providers demanded ComCom reduce the prices charged to them by Swisscom for regulated network access services. The Competition Commission (COMCO) has also launched various investigations against Swisscom in the past.
In its investigation as to the invitation to tender for the corporate network of the Swiss Post in 2008, the Competition Commission (COMCO) reached the conclusion in November 2015 that Swisscom has a dominant position on the market for broadband access for business clients. COMCO imposed a penalty of CHF 8 million on grounds of conduct that was judged to be unlawful under competition law. In June 2021, the Federal Administrative Court largely confirmed COMCO’s ruling and ordered Swisscom to pay a fine of CHF 7 million. Swisscom filed a complaint against this decision with the Federal Court. In its ruling published on 18 April 2024, the Federal Court concluded, in the final instance, that Swisscom had behaved correctly and repealed COMCO’s penalty decision.
On 17 December 2020, COMCO opened an investigation into Swisscom’s optical fibre network and ordered precautionary measures. Swisscom has filed an appeal against these precautionary measures. In its ruling of 2 November 2022, the Federal Court found that the precautionary measures ordered by the Competition Commission (which had previously been confirmed by the Federal Administrative Court) were not arbitrary and confirmed them as well. On 25 April 2024, COMCO published a penalty notice in the amount of CHF 18 million on grounds of conduct which was judged to be unlawful under competition law. Swisscom has appealed against the decision before the Federal Administrative Court.
In April 2013, COMCO launched an investigation against Swisscom under the Federal Cartel Act concerning the broadcasting of sporting events on pay TV. In May 2016, COMCO imposed a penalty of CHF 72 million on Swisscom in these proceedings. Swisscom filed an appeal against this ruling with the Federal Administrative Court. In June 2022, the Federal Administrative Court largely confirmed COMCO’s ruling and ordered Swisscom to pay a fine of CHF 72 million. Swisscom paid the fine in the third quarter of 2022. Swisscom filed a complaint against this decision with the Federal Court. The Federal Court confirmed the fine of CHF 72 million in the final instance on 10 May 2024.
In the past, Swisscom recognised provisions for regulatory and antitrust proceedings on the basis of legal assessments. As a result of the reassessment of these proceedings, provisions of CHF 10 million were made in the first nine months of 2024 and CHF 33 million (including interest) was reversed. Any payments to be made will depend upon the date on which legally binding decrees and decisions are issued, and could probably occur within five years.
Contingent liabilities for regulatory and competition law proceedings
With regard to the contingent liabilities reported in the 2023 consolidated financial statements in connection with regulatory and antitrust proceedings, Swisscom is of the opinion that an outflow of resources is unlikely and, as before, has therefore not recognised any provisions for this in the consolidated financial statements as at 30 September 2024.