Switzerland - Infrastructure, power, and communications

Switzerland has a dense and efficient rail network and an extensive high-class road system with many tunnels to compensate for the mountainous terrain. Overall there are 4,492 kilometers (2,791 miles) of rail lines and 71,059 kilometers (44,156 miles) of roadways. There are 2 large international airports (at Zürich and Geneva) and a few smaller airports with international connections. Landlocked Switzerland also has a modern marine network with some 30 ocean-going vessels based abroad, and carries out river cargo services with connections to the North Sea via the Rhine river. The port of Basel on the Rhine is a major trading hub with efficient connections between rail, road, and water routes. Switzerland is located on strategic crossroads connecting some of the fastest-growing areas of the EU in France, Germany, and Italy.

The agreements with the EU, approved by the referendum in 2000, included the areas of air transport (providing for improved access for Swiss carriers in Europe and similar rights for EU carriers in Switzerland) and road transport (in return for better access to the EU's road haulage market, Switzerland's 28-metric ton truck weight limit will be relaxed in 2001, with full access for the EU's larger 40-metric ton trucks by 2004). Under the new system of taxing heavy trucks by weight, distance traveled, and pollution caused, big trucks will be required to pay a toll of up to US$200 to cross the country. The opening to bigger trucks prompts Swiss authorities to reexamine road infrastructure, and they have started installing electronic devices on trucks to record the mileage traveled in the country, so that tolls could be calculated correctly. In 2001, a 34-metric ton truck meeting the environmental standards is expected to pay about US$95 to travel from Basel on the German border to Chiasso on the Italian border (in 1999, the toll was about US$24).

Airlines also benefited after Swiss voters approved closer economic ties with the EU in 2000. SAirGroup, the holding company of the Swissair airline, got the opportunity to buy a controlling stake in Sabena Belgian Airlines. That will expand its scope of cooperation with foreign partners like American Airlines and boost its presence in France, where it also bought a 49 percent stake in a US$1.4 billion umbrella company that included 3 smaller domestic carriers (Air Liberte, Air Littoral, and AOM) that will have a 30 percent share of the domestic market and will be able to challenge the local giant Air France.

Switzerland has large resources of hydroelectric power in the mighty alpine rivers flowing down from glaciers; they are almost fully exploited. In 1996, hydroelectric plants supplied 54 percent of the Swiss electricity production of 55.1 billion kilowatt-hours (kWh), the lowest proportion for decades, while the country's 5 modern nuclear power stations provided 43 percent. Conventional thermal plants, burning fossil fuels, contributed for only

Country Newspapers Radios TV Sets a Cable subscribers a Mobile Phones a Fax Machines a Personal Computers a Internet Hosts b Internet Users b
1996 1997 1998 1998 1998 1998 1998 1999 1999
Switzerland 337 1,000 535 352.7 235 29.2 421.8 371.37 1,427
United States 215 2,146 847 244.3 256 78.4 458.6 1,508.77 74,100
Germany 311 948 580 214.5 170 73.1 304.7 173.96 14,400
Sweden 445 932 531 221.4 464 50.9 361.4 581.47 3,666
a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.
b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.
SOURCE: World Bank. World Development Indicators 2000.

3 percent of the electricity. Switzerland usually exports and sometimes imports some electricity when in need, mostly from French nuclear power plants across the border from Geneva. During the 1990s, energy consumption declined slightly, relative to the population. This was possibly because of newer energy saving technologies. The government's 1991 "Energy 2000" program aims to stabilize overall energy consumption, following a referendum in 1990 in which the Swiss voted for a ten-year moratorium on the construction of nuclear power plants, but against abandoning nuclear power altogether.

In 2000, the government proposed the liberalizing of the electricity market (allowing many competing utilities to sell power directly to businesses and households), after an earlier reform version had been disapproved. The new plan envisaged a gradual liberalization of the sector starting in 2001, with complete liberalization 6 years later, at a faster pace than required by the EU rules. In the first 3 years of the reform, only the 110 largest Swiss electricity users (all large companies) will have a free choice of supplier, followed by smaller enterprises, and finally by individual consumers. The government holds that a single company must run the national electricity grid. However, critics of the reform, more suspicious of energy liberalization after the California blackouts in early 2001, stress that the new proposals do not provide remedies for the amortization (pay back) of existing sizeable investments in plant and equipment that may be made unprofitable by liberalization. The revenues from a new energy tax, the introduction of which is under consideration and has not yet been approved by parliament, however, may fund some of the required investments. Others may be funded by a surcharge on electricity bills for domestic consumers who are unable to change their suppliers and will be required to pay for the right to remain with their providers. Swiss industry captains pushed for a quick transition. This would cut their electricity bills, which are the highest in Europe, by as much as 25 to 30 percent. The liberalization program, nevertheless, makes a referendum challenge likely, given the political clout of the liberalization critics. The country has some 1,200-electricity producers, most of which are likely to go out of business when liberalization occurs. Many are small companies owned by mountain communes and still enjoy considerable political influence. In anticipation of liberalization, the electricity sector is already undergoing restructuring . In 2000, 3 electricity companies in western Switzerland struck a strategic alliance aimed mainly at providing electricity services to customers, including buying electricity for them in the European markets.

The Swiss telecommunications market was fully liberalized in 1998, in line with the EU telecom regulations. The state-owned telecommunications company, Swiss-com, was split off from the postal service and partly privatized through stock market offerings in 1998. Private companies such as Diax and Sunrise compete with Swiss-com in the full range of telecom services, though in early 1998 they were still arguing over the very high charges demanded by Swisscom to allow them to use its network. Rival private operators are not allowed to build competing networks for connection to private homes, and therefore the interconnection rates charged by Swisscom are crucial for them. By cutting rates for international long-distance calls, Sunrise has already begun to attract customers from Swisscom, which faces additional competition from numerous mobile phone operators.

There is still a growing demand for telecom services, but they are subject to an already very competitive environment as more than 40 local and international carriers are competing in all areas of telecommunication services. Swisscom tries to keep its grip on the most profitable sectors of growth, such as mobile communications, voice transmission, closed user groups, and particularly large business accounts, value-added services, including private virtual networks, and design and operation (with its partners Cisco, Siemens, Alcatel, Ascom/Ericsson) of asynchronous transfer mode (ATM) computer networks. Foreign investment in the Swiss telecom sector is heavy, as many international carriers, such as the American MCI/Worldcom and Sprint-Global One, have established themselves locally, followed by other large players like British Telecom, France Telecom, and Tele Denmark. Vodafone, the British wireless giant, is expected to invest about 5 billion euros in Swiss mobile phone operators. Vodafone has agreed to acquire a 25 percent stake in Swisscom's mobile division but is waiting for final approval from the government, which still has a 65.5 percent stake in the company; the deal will be worth up to 4 billion euros. France Telecom has increased its stake in the Swiss operator Orange Communications by buying (for approximately 1 billion euros) 42.5 percent of Orange's stock from Eon, a German energy group. Massive foreign investment is not only beneficial for customers, but also helps Swiss companies keep up with the latest trends in the market. The introduction of telephone cards by AT&T, MCI, and Sprint-Global One, for example, prompted Swiss companies to introduce their own telecom cards to Swiss subscribers and international travelers.

The International Telecommunication Union, based in Geneva, is an important facilitator in world telecommunications, issuing standard recommendations and organizing important conferences and trade events, such as the quadrennial Telecom exhibition, which is a forum for multinational debates.

Switzerland has high computer usage rates and a large percentage of the population uses computers on a regular basis. 57 percent of the Swiss households owned personal computers and 38 percent had access to the Internet by 2000. This was less than Sweden's 53.5 percent but more than Germany, France, or Italy, where only around 18.1 percent of the population had Internet access. There are more than 150 Internet service providers (ISPs) in Switzerland. Some of the major firms include Blue Window, Iprolink, Infomaniak, Compuserve, and AOL Switzerland. There are also many smaller free services. E-commerce is also increasing rapidly, but the cautious and conservative approach of European consumers has meant that growth will be slower than in the United States in 1998-1999, particularly after the U.S. and European dotcom meltdown in late 2000.

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