Netherlands - KPN and Fibre Strategies

Telecom Investment Research Note

Synopsis

The Netherlands’ largest telco, KPN offers a range of services for consumers and business customers, principally fixed network, mobile, and IP data. Its core European markets are the Netherlands, Belgium and Germany, though it also operates MVNOs in Spain and France. These mobile interests have become a key component of the group’s overall telecom interests, as witnessed by the recent investment in spectrum for its German mobile division E-Plus. KPN’s subsidiary Getronics operates global ICT services while it also provides wholesale services to third parties nationally as well as internationally (through iBasis).

These various domestic and international business interests are under considerable competitive pressure. In addition, regulatory measures have dented revenue, particularly from the mobile sector with its lower termination rates and controlled caps on both voice and data roaming tariffs. To remain profitable in this climate, let alone survive, KPN must invest in areas which will secure revenue for the future while continually looking for new opportunities. This Investors Note highlights some of the issues which the company should anticipate in coming years, particularly with reference to its fibre strategies.

Table of Contents

• 1. Synopsis
• 2. Company health
• 3. The network access question
  • 3.1 Copper access
  • 3.2 Cable access
  • 3.3 Fibre access
• 4. KPN’s fibre conundrum
• 5. New business models required
• 6. Compettitiion not easing
• 7. Background information
  • 7.1 KPN Company Overview
    • 7.1.1 Structural separation
    • Table 1 – KPN network channels, PSTN, ISDN, VoIP – consumer – 2005 - 2010
    • Table 2 – KPN subscribers by sector (consumer) – 2005 - 2010
    • Table 3 – KPN Group financial data – 2004 - 2010
    • Table 4 – KPN financial data by sector (Netherlands) – 2005 - 2010