Dec. 14 (Bloomberg) -- Swisscom AG, Switzerland’s largest telephone company, said its full-year net income will be cut by 1.2 billion Swiss francs ($1.3 billion) because of a writedown on its Italian fixed-line unit Fastweb.

An impairment test showed that Fastweb’s corporate value at the end of 2011 is about 1.3 billion euros less than the book value of the asset excluding goodwill, Bern-based Swisscom said in a statement today. The writedown will not affect the Swisscom’s dividend plans, it said.

“Difficult economic situation in Italy and lower future growth lead to an impairment of Fastweb,” Swisscom said in its statement. “The difficult economic situation and increasing interest rates have lead to reduced prospects for growth and higher cost of capital in Italy.”

Swisscom, which acquired Milan-based Fastweb in 2007 to offset slowing growth in the Swiss market, has suffered from competition in Italy and a weak euro that weighs on revenue converted into francs.

--Editor: Kenneth Wong

To contact the reporter on this story: Kenneth Wong at kwong11@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net