27th March 2019
Daniel Pfund, Senior Financial Analyst
Several years ago, Swisscom praised the merits of “quadruple play” – the opportunity to offer fixed, mobile, internet and television services. The underlying argument is that the customer will be much more captive if he is offered everything with a single bill. From this point of view, it is a very strong argument, as long as quality is at the rendezvous.
This convergence between the fixed and the mobile is all the stake of the Sunrise – UPC merger. Until now Sunrise had to rent fixed lines from Swisscom, with often questionable rates. After the merger, Sunrise will finally be able to offer customers a complete solution, provided that the cable is available at the customer’s premises.
But will this merger be a good deal for the end customers or only for the shareholders? Indeed, if the merger was accepted, it would cause almost a situation of duopoly. The smaller players, like Salt would be marginalised. Tariffs would be less competitive and in the end, all Swiss telecom companies might invest less in new technologies. It remains to be seen whether the merger will be accepted by the shareholders. Indeed, Freenet, the majority shareholder of Sunrise, seems to want to refuse the necessary capital increase and will surely vote against at the extraordinary meeting.