Swisscom AG (commonly listed as Swisscom) is one the leading telecommunications companies in Switzerland. Much like Swiss Post, Swisscom came about a successor to the once state-owned PTT. They are headquartered in Bern and are still majority owned by the Swiss Confederation. Swisscom has come a long way since their separation from the state, but have they done enough to give Swisscom shares serious profit potential?

History

Swisscom were once a part of Switzerland’s infamous PTT (founded back in 1852), but in 1988 the country entered a state ofOnlineTrading privatisation that allowed Swisscom to step-out from the PTT. Even though they have done such the Swiss Confederation still owns a controlling stake in the company. This has caused its fair share of controversy throughout the history of the company, and in 2006 the Federal Council sought change. They proposed that parliament fully privatise the company in the interest of fairness, the National Council would eventually reject this proposal. The rejection is something that potential Swisscom shares buyers need to consider, as it plays a huge part in the direction of the company. During the fall of 2007, Swisscom announced the closure of several sub-brands in an attempt to stabilise the company’s identity. The company also redesigned their logo and did all they could to further themselves from their state branded image, only time will tell if such rebranding will have an effect on Swisscom shares.

Services

Swisscom services cover the whole of Switzerland and are vast in delivery. The lead division within the organisation is Swisscom Ltd, such sector underwent a reshuffle in January 2008, this involved the dissolution of Fixnet, Mobile and Solutions in order to be replaced by Residential Customers, Small and Medium-Sized Enterprises and Corporate Business Divisions. While the IT platforms were integrated into a solo network and IT division. Swisscom also operates an independent IT service, that has become of the leading IT service in the country. Within the IT services section of the company is the once known Comit brand, which handles finance services. Swisscom has also branched out of Switzerland by acquiring a major holding in Fastweb, an Italian based company. By May 2007 the company owned 82.4% of the company. It was an expensive acquisition that showed those who own Swisscom shares that the company is not afraid to make big moves in the telecommunications market.

Tragedy

Sadly, amidst the company’s reorganisation efforts tragedy struck. CEO Carsten Schloter was found dead in what was an apparent suicide in July 2013. It was an incident that hurt the company immeasurably, largely as the reshuffle was taking place under his command. Urs Shcaeppi has stepped in as interim CEO in the meantime, but only time will tell if he has what it takes to follow through with Schloter’s vision for Swisscom.

Final Thoughts

Swisscom may be the largest telecoms company in Switzerland, but they are definitely a company still in transition.  Those who buy Swisscom shares do so knowing that there may be rough times ahead before the share price reaches the heights it has hit previously.

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