Swisscom said it will draw up a new strategy after the Swiss government blocked it from making foreign acquisitions and effectively torpedoed its planned takeover of Eircom.
The talks with Eircom have now been broken off, Swisscom said in a statement this morning.
Swisscom said members of the executive board and the board of directors would not make any "personnel-related decisions regarding their own person" until the new strategy is in effect - due by the end of the year.
"In view of the decisions taken on Friday by the Federal Council and its own assessment carried out over the weeekend, Swisscom has assured the government that it will not make any decisions on acquisitions of holdings on foreign telecoms companies with a public service mandate until the ... strategic goals for 2006-2009 have come into force," Swisscom said.
The Swiss government holds a 66-per cent stake in Swisscom. It said in a statement late on Friday that the company was not permitted to take over any overseas telecoms firms that had a public service function in both fixed-line and mobile services at least until December 21st, after which it would publish a plan for 2006-2009.
The government's statement on Friday opened the possibility that it could roll back its ban on foreign acquisitions under the new guidelines. Swisscom has repeatedly said it was looking to expand abroad as tough competition at home from the likes of Cablecom and Sunrise, a subsidiary of Denmark's TDC, squeezes margins.
It was thwarted in recent attempts to buy Cesky Telecom and Telekom Austria, but the Austrian telecoms operator may be on the block again soon.