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Journalism of Courage
BONN, APRIl 15: Swisscom, which recently pulled out of India and Malaysia, is facing a Swiss government probe into its $ 490 million loss written off by the Swiss telecom major in 1998 stemming from its foreign holdings in the two countries.
According to Swisscom’s chief executive officer Toni Reism the company had overall invested and written down around $ 500 million for the two units in India and Malaysia.
While Swisscom had a joint venture – Sterling Cellular – in India with the Essar group, it had a stake in Mutiara Swisscom BHD in Malaysia. The Swiss company had held minority equity stake in both the companies, before opting to jettison its two Asian units.
Swisscom, which had invested billions of dollars abroad to counter the arrival of stiff competition in the telecom sector in Switzerland, said it would henceforth concentrate more on Europe. It also planned to cut 4,000 jobs through 2001 in an effort to raise earnings.
Swisscom as part of its strategy to focus on international activities andfollowing a comprehensive and critical evaluation of various options decided to withdraw from the holdings in India and Malaysia. There are at present about 15 joint venture projects in India in the telecom sector with foreign partners.
European telecom companies including the partially privatised Swisscom and Deutache Telecom, which were earlier fully state-owned, are facing increasing pressure from new players to capture the lucrative market in the continent.
According to Swisscom officials, the company’s investments would rise to about $ 1.2 billion in 1999 up from $ 900 million in 1998. They said Swisscom’s profitability, with earnings before income tax, depreciation an other financial factors compared well with other operations.
