General

KPN results down across Dutch activities

Tuesday 26 July 2011 | 12:33 CET | News
KPN reported revenues and results down in a number of areas in the second quarter, with its mobile activities outside the Netherlands particularly affected by regulatory measures. Growth also slowed at its unit iBasis, due in part to negative currency effects. Operating costs were up 1.2 percent, but personnel costs were down 4.5 percent. The number of employees was down by 523 from a year ago but rose by 64 from Q1 to 30,598, due to extra staff at calls centres and shops. 


At the consumer activities in the Netherlands, revenues fell 3.7 percent, with an underlying drop of 2.2 percent, to EUR 953 million. EBITDA was down 6.2 percent, with an organic drop of 7.1 percent, to EUR 271 million, due in part to rising handset subsidies. Consumer mobile revenues were under pressure from apps used for voice and SMS services, as well as free Wi-Fi. Smartphones have now reached 47 percent of the customer base. The operator added just 1,000 subscribers in the quarter for a total 5.505 million at the end of June, down 8.1 percent from a year ago. Service revenues fell 8.7 percent to EUR 409 million, but ARPU was stable at EUR 25. Data's share of revenues rose to 39 percent from 37 percent in Q1 and 34 a year ago. The number of voice minutes rose to 118 from 116 a year ago and SMS was up to 55 messages per customers from 54. The average cost of acquiring and retaining a customer rose to EUR 164 from EUR 157 a year earlier. 


At the consumer fixed-line activities, line loss totalled 45,000. KPN lost 51,000 fixed lines and 11,000 broadband customers, but added 42,000 TV subscribers and 11,000 FTTH customers. The operator had 2.87 million fixed lines at the end of the quarter, down 7.5 percent from a year earlier, while the broadband market share was stable at 41 percent with 2.56 million customers, of which 61,000 via FTTH. TV customers totaled 1.28 million, good for an estimated market share of 16 percent. The number of Digitenne users fell by 14,000 in the quarter, while IPTV grew by 56,000 subscribers. The number of services per customers was 1.9, up 5.6 percent from a year earlier, and triple-play customers grew by 36 percent to a total 565,000. Broadband ARPU was stable at EUR 32, and TV ARPU rose 22 percent to EUR 11. 


In the Dutch business market, KPN's revenues fell 0.7 percent to EUR 600 million. On a comparable basis, excluding the EUR 12 million in sales from the takeover of Atlantic Telecom, sales were down 2.7 percent. EBITDA rose 3.0 percent, but was down 1.5 percent on an organic basis, to EUR 203 million. This reflects the growth in smartphone sales, which boost revenues but reduce EBITDA through high acquisition and retention costs (EUR 224 versus EUR 215 a year ago). On the business mobile market, the company added 108,000 customers for a total 1.92 million, of which 63 percent had a data plan, up from 53 percent a year ago. KPN claims its market share was stable. ARPU fell 11 percent to EUR 42, of which 31 percent from data. Minutes of use were stable at 275 per customer per month, while SMS traffic rose 9.6 percent to 148 million. The loss of business fixed lines was 27,000 in Q2 for a total 2.34 million, while the DSL base rose by 3,000 to 171,000. Users of the Applications online service rose 41 percent from a year ago to 86,000. 


At the wholesale and operations division, revenues fell 6.4 percent to EUR 659 million, and EBITDA was down 2.4 percent to EUR 414 million. The unit suffered from a drop-off in traditional services, but costs were also down as a result. Job cuts and new supplier contracts led to a higher margin. Reggefiber added 75,000 FTTH homes passed for a total 768,000, while the number of FTTH subscribers rose by 17,000 to 215,000, of which 61,000 for KPN. The VDSL network is also being expanded, with deployment of pair bonding to start on an on-demand basis in Q1 2012. 


At the IT unit Getronics, revenues fell 3.3 percent to EUR 462 million and EBITDA plunged 63 percent to EUR 15 million. Managed services demand was low, prices are under pressure, and customers are delaying investments. Excluding a restructuring charge of EUR 7 million, the margin was 4.8 percent in Q2. In addition to the announced 2,000 to 2,500 job cuts, Getronics hopes to improve results by focusing on cloud services. 


At iBasis, revenues rose 3.8 percent to EUR 246 million, with currency rates having a negative effect of 13 percent. EBITDA was up 11 percent to EUR 10 million. The Rest of World activities generated revenues of EUR 49 million, up 44 percent, but EBITDA remained a negative EUR 2 million due in part to investments at Ortel. KPN's MVNOs had 550,000 subscribers in Spain and 650,000 in France, up from 400,000 in each country at the end of 2010. 


Categories:
Countries:
::: add a comment