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READER QUESTION

EXPLAINED: Can I terminate my Swiss telecom contract early?

When you sign up with a telecom provider in Switzerland, your fate is sealed: you must remain with that company until your agreement expires. But what if you want to get out of the contract ahead of schedule?

EXPLAINED: Can I terminate my Swiss telecom contract early?
Premature cancellation of your telecom contract could mean hefty fees. Photo: Pixabay

On July 24th, 2024, Switzerland’s largest telecom operator, Swisscom, has abandoned its inOne Home package, which includes the telephone, Internet and television, and replaced it with another service, Basic Home.

But the cost of the subscription increased from 50 francs a month to 59.90 francs.  

If you happen to be one of the Swisscom customers affected by this change, but did not cancel your subscription on time (read more about this below), you were ‘migrated’ to the new bundle automatically — and will be charged accordingly.

What happens if you don’t want this more expensive service but have not cancelled your contract in time?

More specifically, can you terminate your telecom subscription — whether with Swisscom or another company — at any time?

The simple answer is yes, but it will cost you money.

That’s because telecom contracts typically have a minimum term — usually 12 or 24 months, but this can vary — as well as the required cancellation notice period.

Each of Switzerland’s three main telecom providers — Swisscom, Sunrise, and Salt — have a two-month termination notice period, at calendar month’s end.

This is the usual notice period for smaller providers like Yallo, Wingo, Coop Mobile, LidlConnect, and M-Budget Mobile as well.

On the other hand, prepaid mobile services don’t require notice periods and can be terminated at any time.

What are the penalties for early termination?

If you cancel your service within the contractual notice period, then you are in the clear.

However, failing to do so can be expensive.

The reason is that telecoms will not just let you off the hook and wish you well while you contract with one of their competitors.

Most likely, you will be faced with one of two scenarios: the company will charge you penalty fees or continue to bill you for the plan until the notice period has expired.

Also, according to Moneyland consumer platform, “a practice that is widespread among Swiss telecom companies is to continue charging you the basic fees for your plan until the contract term expires… Regardless of whether you are terminating ahead of the contract term or just the notice period, telecom companies will require you to pay the full outstanding amount in both cases.”

In terms of actual amounts, they vary from one provider to another.

Swisscom charges the highest penalty fees for breach of contract — up to 4,800 francs.

Other mobile service providers impose penalties of several hundred francs, according to Moneyland.

Exceptions to the rule(s)

You are allowed you to terminate your contract early without penalties when a ‘negative’ change is made to your plan — that is, telecom provider reduces or drops services that were previously included.

Penalties can also be waved if you cancel your subscription early because you move out of Switzerland.

If you relocate within Switzerland, you won’t have to pay penalties, but only if your new home is completely uncovered by your provider’s mobile network.

Additionally, even though Swiss telecoms have a contractual right to raise their prices once a year to match changes in the consumer price index, these increases do entitle customers to terminate their contract early without penalty fees.

And, last but not least, death is also deemed a justifiable excuse to wave penalties.

As Moneyland put it, “all Swiss telecom companies take a customer-friendly approach in the case of death, allowing relatives to terminate the deceased’s contracts immediately without paying penalty fees.”

Can you just refuse to pay the early termination fees?

Unless you move out of the country, or go to live in an extremely rare place in Switzerland where there is no wi-fi coverage (like a cave), or die, then you do have to pay the penalties — unless you come to an amicable agreement of some sort with your telecom provider.

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For members

MONEY

Three budget cuts Switzerland wants to make that will impact you

This may come as a surprise to anyone believing Switzerland has no money woes, but the country is facing a deficit of several billion francs. Here are some ways it is planning to solve it.

Three budget cuts Switzerland wants to make that will impact you

Switzerland’s deficit — estimated at about 3 billion francs a year — is mostly due to additional spending on boosting up the army and state pensions.

To keep a tighter grip on its expenses, the Federal Council has set up a group of experts tasked with analysing the state of Swiss finances and proposing some cuts to achieve its goal of reducing the budget by at least 3 billion francs by 2027 and by at least 4 billion by 2030.

The group has presented over 60 measures that could considerably curb government spending, making it possible to save 4 to 5 billion francs per year.

These are some of the proposed measures that could, if approved, impact many households in Switzerland:

Social welfare

One idea is to scrap federal subsidies for childcare, leaving the funding of the scheme to each canton.

“Elimination of support for extra-familial childcare would have the most significant impact, resulting in savings of between 800 and 900 million francs a year,” the experts reported.

Pensions

The group proposed to abolish tax benefits for capital withdrawals under the second and third pillar-pensions.

This measure, which would reduce tax incentives to withdraw retirement capital, would generate an additional income for the federal government of about 200 million francs per year.

READ ALSO: What is Switzerland’s ‘third-pillar’ pension and how can it benefit you? 

Public transport and road infrastructure

Financing of the railway infrastructure fund (BIF) and the national road and agglomeration transport fund (NAF) are to be reduced.

Projects that are not yet under construction would have to be ‘re-prioritised’: they would require a constitutional amendment with a mandatory referendum.

What is happening next?

Right now, these are just proposals put forth by the expert panel, and may or may not be implemented in the end.

The next step is for “all the measures proposed by the group of experts to be discussed with the cantons, political parties, and social partners during round tables,” the Federal Council said.

“Following the round tables, the Federal Council will decide which measures to adopt and submit to the ordinary consultation procedure. This will probably begin in January 2025,” the government noted. 

Does all of this mean Switzerland is in financial trouble?

Not really.

In fact, it is on a more solid financial ground than most countries.

According to media reports, “despite the higher budget deficits, Switzerland’s government debt will still be low by international comparison, reaching 16.6 percent of GDP by 2028. This compares with 46 percent in Germany, 92 percent in France and far below the 101 percent level in Britain, according to data from the International Monetary Fund.” 

READ ALSO: What is Switzerland’s debt brake and how does it affect residents? 

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