8 Provisions and contingent liabilities
Provisions
Provisions changed as follows in the first nine months of 2021:
In CHF million |
Dismantlement and restoration costs |
Regulatory and competition law proceedings |
Termination benefits |
Others |
Total |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2021 | 741 | 233 | 63 | 179 | 1,216 | |||||
| Additions to provisions | – | 60 | 1 | 26 | 87 | |||||
| Adjustments recognised under property, plant and equipment | (38) | – | – | – | (38) | |||||
| Present-value adjustments | 3 | 27 | – | – | 30 | |||||
| Release of unused provisions | – | – | – | (20) | (20) | |||||
| Use of provisions | (7) | (8) | (16) | (24) | (55) | |||||
| Balance at 30 September 2021 | 699 | 312 | 48 | 161 | 1,220 | |||||
| Thereof current provisions | – | 40 | 44 | 58 | 142 | |||||
| Thereof non-current provisions | 699 | 272 | 4 | 103 | 1,078 |
In accordance with the revised Telecommunications Act, Swisscom provides access services (incl. interconnection) to other telecommunication service providers in Switzerland. In February 2020, a provider of telecommunications services requested from the Federal Communications Commission (ComCom) that the interest on recovery claims from access-related proceedings should be based on the weighted average cost of capital (WACC). In June 2021, ComCom confirmed this interest rate regulation. Swisscom filed an appeal against this ruling with the Federal Administrative Court in the third quarter of 2021.
In its investigation as to the invitation to tender for the corporate network of the Swiss Post in 2008, COMCO reached the conclusion in November 2015 that Swisscom has a dominant position on the market for broadband access for business clients. As a result of this conduct, which was judged to be unlawful under competition law, COMCO imposed a penalty of CHF 8 million. Swisscom has challenged COMCO’s rulings concerning the invitation to tender for the corporate network of Swiss Post in the Federal Administrative Court. In June 2021, the Federal Administrative Court largely confirmed COMCO’s ruling and ordered Swisscom to pay a fine of CHF 7 million. As a result of the legally binding decision on abuse of a market-dominant position, claims could be asserted against Swisscom under civil law.
In December 2019, the Federal Supreme Court dismissed a complaint by Swisscom in the COMCO proceedings for abuse of market dominant in ADSL services in the last instance and affirmed the penalty. As a result of the legally binding determination of market abuse, civil law claims were filed by telecommunications service providers in the second quarter of 2020. Negotiations in respect of these civil claims took place in the second quarter of 2021. The civil proceedings have not yet been concluded.
COMCO opened an investigation into Swisscom’s optical fibre network in December 2020 and ordered precautionary measures against Swisscom. In its ruling of 30 September 2021, the Federal Administrative Court confirmed the precautionary measures ordered by COMCO on 16 December 2020 and dismissed Swisscom’s appeal.
In the past, Swisscom recognised provisions for regulatory and antitrust proceedings on the basis of legal assessments. Due to a reassessment of these proceedings, provisions of CHF 34 million were recognised in the third quarter of 2021. 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 antitrust proceedings
With regard to the contingent liabilities reported in the 2020 consolidated financial statements in connection with regulatory and antitrust proceedings, Swisscom is of the opinion that an outflow of resources is unlikely and has therefore, as before, not recognised any provisions for this in the consolidated financial statements as at 30 September 2021.