KPN under fire on Tros Radar

Tuesday 7 September 2010 | 15:34 CET | Market Commentary
KPN's fibre-optic service (KPN Glasvezel) has come under criticism in a broadcast of the consumer show Tros Radar. Various unsatisfied customers gave their opinions, and it appears KPN also did not get its staff on one line. Customer service staff pointed to the 'targets' imposed by the sales department and a technician, filmed with a hidden camera, was also critical of the operator. In other words, the sales department is too aggressive and is not taking account of a number of imitations to the service. These include KPN's billing system, the technology used and poor cabling in homes. Last year these 'limitations' were enough for KPN to halt marketing of the service. Given these complaints, there are a number of areas still needing improvement. These include:

• The quality of the TV signal. It's highly questionable whether this can be delivered to the TV via a PLC (powerline communications) connection. Furthermore, KPN is incorrectly promoting this technology as cordless. This runs up against an important problem for fibre: the in-home cabling. New cables are a non-starter for many consumers, but whoever wants to enjoy FTTH fully will need to have a solid in-home network.
• The internet connection speed. The broadcast offered little concrete on this, but KPN has every reason to keep a close watch here. It's standard practice in the industry to advertise a maximum speed, and in some countries, even a minimum speed needs to be include, but that is difficult to realise. However, research from Telecompaper and iPing shows that in general fibre does well delivering the advertised speeds.
• KPN Glasvezel makes no distinction between FTTH and FTTN. In the case of FTTH, fibre runs to the street and the connection to the customer is based on copper or VDSL2. By calling FTTN fibre, KPN is only doing the same as UPC (Fiber Power) and Tele2 (Fiberspeed), but it could be to KPN's benefit if it underlined the difference.

KPN tried to put the problems in perspective in its reaction to the programme. At the end of June there were 2,000 complaints registered and currently 600 of these are still outstanding. That's out of a total 200,000 subscribers. One can also point out that a programme like Tros Radar can exaggerate the issues.

KPN's Q2 report showed that the operator and partner Reggefiber (responsible for the passive part of the FTTH network) are rolling out FTTH slower than expected. In addition KPN is approaching a power vacuum, as the successor of CEO Ad Scheepbouwer (who will step down in mid-2011) should be announced within a couple months. To make it worse, the competition is on the move:

• Tele2 has acquired BBned and is planning to roll out its own mobile network.
• Cable operators are doing well with Docsis 3 and digital TV services.
• UPC and Ziggo are planning to enter the mobile market.
• Vodafone is partnering with Eurofiber to expand in the business market.

Conclusion: the Tros broadcast comes at an inconvenient moment. After years of delivering a strong (quarterly) performance, the tide is against KPN. The problems with fibre should not be overstated, but KPN will definitly need to step it up.

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