UPDATE: Swisscom's CHF333 Million Mobile Phone Fine Is Lifted

Swisscom AG (SCMN.VX) no longer has to pay a CHF333 million ($374 million) fine after the Swiss Federal Supreme Court Wednesday decided it had not abused its position to overcharge mobile phone termination fees.

The court upheld Swisscom's appeal against the fine which was imposed by the country's Competition Commission following an investigation launched in 2002.

Swisscom had not set aside any provisions to pay for fines arising from the inquiry, which looked at mobile phone termination charges levied by operators in Switzerland.

Mobile termination charges are the charges that a mobile phone operator levies on other telecommunication providers for terminating calls on its network.

Chairman Anton Scherrer said, "We have just received some good news. The Federal Supreme Court has confirmed the original fine of CHF333 million is to be lifted."

Scherrer said the court had decided that Swisscom did not dominate the mobile phone market in Switzerland completely, and operated fully in line with legal requirements.

The matter began in October 2002 when the Competition Commission launched an investigation into mobile phone termination charges of Swisscom, Sunrise and Orange, the three mobile phone operators in Switzerland.

The Competition Commission imposed the fine after finding that Swisscom held a dominant position in the market and had abused that by levying unreasonably high charges on other telecoms providers between April 1 2004 and 31 May 2005.

It also continued its investigation into the mobile phone termination charges for all three companies for the period after 31 May 2005.

In its ruling, the Federal Supreme Court said Swisscom did not act improperly when setting mobile phone termination charges and there was no legal basis to conclude the company occupies a dominant position in the market.

"Today's ruling by the Federal Supreme Court confirms Swisscom's view that it negotiates mobile termination charges with the other telecommunications providers," Swisscom said in a statement.

"If the other providers are dissatisfied with the outcome of the negotiations they can file a complaint to the Competition Commission. Swisscom is therefore not able to set binding prices."

-By John Revill, Dow Jones Newswires; [phone] ; [e-mail]