Swisscom Wants FastWeb

BERN, Switzerland -- Swisscom today submitted a proposal to Fastweb Board of Directors to launch an all-cash friendly public tender offer on 100% of Fastweb, Italy's second largest fixed-network operator and leading provider of IP-based services. Swisscom intends to offer to all Fastweb shareholders EUR 47 per share for a maximum total consideration of EUR 3.7 bn (about CHF 6 bn). Prior to submitting its proposal, Swisscom, with the consent of the Board of Directors of Fastweb, has performed a confirmatory due diligence exercise on Fastweb. Swisscom intends to make a long-term investment and to further strengthen the competitive position of Fastweb based on a new generation network and innovative offerings in Italy.

Italy is one of the most attractive broadband markets in Europe with significant expected growth potential over the next few years. Fastweb is Italy's leading alternative broadband telecommunications provider with more than one million customers, 2006 revenues and EBITDA of respectively EUR 1.26 billion (CHF 2.04 billion) and EUR 424.6 million (CHF 691 million). Fastweb delivers innovative telephony, Internet and television services in more than 130 cities via state-of-the-art broadband networks based entirely on Internet protocol. For Swisscom, the transaction is a logical step in the implementation of its corporate strategy aimed at growing its core business and increase company value through new activities. The acquisition will strengthen Swisscom in three areas:

In the field of new technologies, which are key to the further development of Swisscom's infrastructure, Fastweb has a lead of three to five years.

Fastweb also has a competitive edge in terms of expertise in the strategically important field of multimedia applications based on broadband, and has been delivering IPTV to its customers since 2001.

By acquiring Fastweb, Swisscom will be able to boost its cash flows significantly. Fastweb is a high-growth company with an increasing free cash flow over time. The transaction has the potential to boost Swisscom's revenues and EBITDA by about one fifth, and generate further growth thereafter. Fastweb will therefore make an important contribution to Swisscom's financial results within a short time period.

Swisscom AG (NYSE: SCM)