Swiss parliament rejects Swisscom privatization

The lower house of the Swiss parliament voted Wednesday against the privatization of telecom company Swisscom after the government proposed to sell its majority share, a Dow Jones report said.

According to the report, 99 members of parliament voted against the federal cabinet's plan to sell its more than 60% stake in Swisscom, while 90 lawmakers were in favor.

The next step would be for the upper house to vote on the plan in August, the report said. If again turned down, the privatization plans, in their current shape, would have failed.

And that was the most likely scenario, said Panagiotis Spiliopoulos, an analyst with Swiss private bank Vontobel in Zurich, who had a market perform rating on the stock.

"The upper house tends to vote with the left," he said, referring to strong opposition to the sale from left-wing parties, according to the report.

In the fall of 2005, the Swiss government announced plans to dispose of its majority stake, saying privatization would allow Swisscom to take greater risks, the report said.

The lower house's decision was expected, after a special parliamentary committee voted against the privatization last month by a slim margin, citing worries that the nation's leading telecom firm could fall into foreign hands, the report further said.

Swisscom said it regretted the lower house's decision not to support the privatization proposal, according to the report.

"Full or at least partial disposal of the government stake makes sense for the further development of Swisscom, particularly in view of Swisscom's need to penetrate new business areas in Switzerland and abroad," said Swisscom spokesperson Pia Colombo.