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Case
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Reference no. 499-022-1
Authors: Claudia Jonczyk Sedes (GSEM / Executive Programs); Gilbert Probst (GSEM / Executive Programs)
Published in: 1999
Length: 18 pages
Data source: Field research

Abstract

Multilink was a 50-50 joint venture created in Switzerland in 1998 by France Telecom and Deutsche Telekom; both companies hoped to gain shares of foreign markets to compensate for losses in domestic market share. Multilink''s objective was to become the third alternative carrier by 2003 in its targeted markets, ie small and medium enterprises, small offices/home offices and high residentials. The Swiss market was amongst the most profitable in the world in 1999 (total size SFr10bn). In 1998, 67% of Swiss residents had a fixed line, and by the beginning of 1999, 26% had a mobile telephone and about 20% of the population were Internet users. There were about a dozen serious competitors on the Swiss market. The main telecommunications company was Swisscom, the former monopoly, which owned the national backbone and still held 93% of the market in June 1999. In addition there were alternative carriers such as Diax, Sunrise and Orange. There was also another DT/FT joint venture called Global One, which targeted the largest customers on the Swiss market. Multilink was in trouble on all fronts. It was lagging behind its self-imposed objectives: it had not arrived as a clear and stable strategy; and it was struggling on the one hand to gain enough autonomy from its shareholders, and on the other hand to obtain adequate support from them. There are many useful lessons to be learned from Multilink''s experiences.
Location:
Industry:
Size:
SME (small to medium-sized enterprise)
Other setting(s):
1998-1999

About

Abstract

Multilink was a 50-50 joint venture created in Switzerland in 1998 by France Telecom and Deutsche Telekom; both companies hoped to gain shares of foreign markets to compensate for losses in domestic market share. Multilink''s objective was to become the third alternative carrier by 2003 in its targeted markets, ie small and medium enterprises, small offices/home offices and high residentials. The Swiss market was amongst the most profitable in the world in 1999 (total size SFr10bn). In 1998, 67% of Swiss residents had a fixed line, and by the beginning of 1999, 26% had a mobile telephone and about 20% of the population were Internet users. There were about a dozen serious competitors on the Swiss market. The main telecommunications company was Swisscom, the former monopoly, which owned the national backbone and still held 93% of the market in June 1999. In addition there were alternative carriers such as Diax, Sunrise and Orange. There was also another DT/FT joint venture called Global One, which targeted the largest customers on the Swiss market. Multilink was in trouble on all fronts. It was lagging behind its self-imposed objectives: it had not arrived as a clear and stable strategy; and it was struggling on the one hand to gain enough autonomy from its shareholders, and on the other hand to obtain adequate support from them. There are many useful lessons to be learned from Multilink''s experiences.

Settings

Location:
Industry:
Size:
SME (small to medium-sized enterprise)
Other setting(s):
1998-1999

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