Swisscom chief steps down after row over Eircom

The Swisscom chief executive who led the company's failed bid for Eircom has resigned in a row with its biggest shareholder, the Swiss government.

Jens Adler resigned as chief executive of the Swiss state-controlled telecoms company yesterday.

Swisscom issued a statement yesterday confirming the move, and announcing that the head of its mobile division, Carsten Schloter, will succeed Mr Adler.

The move was the final twist in a public row between Mr Adler and the Swiss government, which holds 62.45 per cent of Swisscom, over the company's attempts to buy out Eircom, the Republic's dominant fixed-line player.

The government announced that it was freezing any attempts by Swisscom to make foreign acquisitions as the company was in the final stages of carrying out due diligence on Eircom.

Swisscom indicated in November that it was prepared to pay around €2.57 billion for the Irish group, but the Swiss government's surprise announcement ended the process prematurely.

Mr Adler said he was angry at the government's decision, particularly as he believed he had its support up to that point, but vowed to stay at the helm.

However, it was widely believed he would step down, as the government did not support his expansion plans for the company.

The markets reacted broadly positively to the news. Swisscom shares gained 1.3 per cent to €258 during mid-morning trading in Zurich.

Merrion capital telecoms analyst, Bríd White, said the move was positive for the company. "Obviously when you have a CEO who's been discredited in that way, it's negative for any company," she said.

She pointed out that Mr Adler had believed that the government backed him through the Eircom bid and several other Swisscom attempts to buy other operators.

Ms White added that Mr Adler had consistently said in public over the last 18 months that he wanted to make a large acquisition, and he assumed he had his biggest shareholder's backing.

Locally, telecoms analyst with Switzerland's Bank Vontobel, Panagiotis Spiliopoulos, told news agency Swissinfo that ending "this chapter and proposing Schloter as the new CEO is definitely seen as positive".

The Swiss government may cut its 64 per cent holding in Swisscom in the medium term. However, Ms White pointed out yesterday the law means that it must always keep more than 50 per cent of the company.