8 Provisions and contingent liabilities

Provisions

Provisions changed as follows in the first six months of 2022:

In accordance with the revised 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. The procedures for setting access prices for 2013 onwards are still pending before ComCom. In addition, an appeal is pending before the Federal Administrative Court in connection with the interest on recovery claims from access-related proceedings, which should be based on the weighted average cost of capital (WACC).

The Competition Commission (COMCO) has opened various investigations against Swisscom in the past. In April 2013, COMCO opened 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 appealed against this ruling before 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. The fine will be paid by Swisscom in the third quarter of 2022. Swisscom has lodged an appeal against the decision of the Federal Administrative Court with the Federal Court. Also pending are the appeals to the Federal Court against COMCO’s rulings in connection with the invitation to tender for a corporate network for Swiss Post and the precautionary measures concerning Swisscom’s fibre-optic expansion. In the event of a legally binding finding of abuse of a market-dominant position, claims could be asserted against Swisscom under civil law.

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 84 million were made in the first half of 2022 and present-value adjustments of CHF 8 million were recorded. 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 other contingent liabilities reported in the 2021 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 June 2022.