Swisscom loses USD1.3bn with Fastweb writedown

Wed Dec 14 2011, 16:29 PM

Swisscom admitted on Wednesday to a USD1.3bn impairment charge on Italian subsidiary Fastweb. The Swiss telecommunications group attributes its decision to “reduced prospects for growth and higher cost of capital in Italy” following wider economic problems in Europe. Fastweb’s proprietary fibre optic network provides telephony and internet to over 2m Italian households, making up a 20% market share. However, the company is suffering from a decline in average revenues per user, combined with intense pricing competition and heavy bad debt losses. “The Fastweb writedown is no surprise and was already the subject of speculation last year,” says Serge Rotzer, sector analyst at private bank Vontobel.

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