KPN presented its financial results for the second quarter of this year, but it did not mention developments like i-mode or Wi-Fi. According to Ad Scheepbouwer, CEO of KPN, this was only because KPN had to make a choice among the most important highlights of the second quarter. According to analysts the deployment of i-mode as well as the development of wireless LAN are lagging behind but KPN denies this. The positive results in the second quarter brought the Board of KPN to the following conclusions:
· Strong margin expansion, solid performance in the second quarter and further net debt reduction
· Net profit fourth quarter in a row
· Further expansion of E-Plus customer base which leads to a solid position on the German market
· Strong growth of ADSL connections despite heavy competition
In the coming years KPN will focus on strengthening not only the position of E-Plus in Germany but also of mobile operator BASE in Belgium. KPN will also focus on further growth of ADSL and despite objections by regulator OPTA KPN will introduce new attractive fixed telephony offerings.
Despite all the good news the company also reported some problems. First of all the conflict with regulator OPTA. On August 6th OPTA decided not to allow KPN any extra scope for discounts and saving packages. KPN objects to being restricted in offering attractive packages to customers. Existing schemes such as the discount packages introduced on July 1st and so called "Friends and Family numbers" may continue. Another problem to KPN are pension charges. In order to increase the diminishing coverage ratio KPN has to refund over EUR 285 million in the coming five years. And at third place the risk of a price war for all kinds of services, with the current ADSL price war as a good example.
Telecom.paper had an interview with Ad Scheepbouwer, CEO of KPN. To start with the conflict with regulator OPTA. KPN decided not only to go to court but to complain at the Dutch ministry for Economic Affairs as well. Ad Sheepbouwer: "I appealed to the Ministry of Economic Affairs because the policy making regarding telecommunications is on their target list. But at this moment we see that the regulator in The Netherlands is making not only the policy but keeps an eye on the way companies comply to these regulations and on top of that Opta executes the regulation. The regulator has its own agenda. I don't think this is what the minister of Economic Affairs wants."
Telecom.paper: So what are you going to ask him to do?
Ad Scheepbouwer: "We are going to ask him to set up a policy. He has to point out what in his opinion the telecommunication industry in The Netherlands should look like. Should that be first class or could it be off lesser quality. Or do we want a bare bone network as the regulator proposes with roughly about one hundred times more disturbances as we have at this moment. That's the first thing we want to know. Secondly we want to know if the minister wants a market where competition is about best service and the best price or does he share Opta's opinion that KPN has to go back to a fifty percent market share regardless the quality of service KPN is offering. These are to my opinion relevant questions."
Telecom.paper : Are you going to inform the minister that if the conflict with Opta will not be settled, you are going to invest outside The Netherlands?
Ad Scheepbouwer: "That would be the wrong way of putting it. If Opta continues to give us a discount on our investments we run into problems. If for instance we invest in fiber to the home in The Netherlands for lets say a couple of million euros and Opta decides that the value of the network will be only 75% of the real costs. And next competitors must have access to this network but only have to pay access regarding this 75%. If this happens we can no longer invest and only do the bare minimum. If we can't invest the money in The Netherlands because of this policy by Opta, it will be invested
