Dutch operator KPN reported first-quarter revenues down 1.3 percent to EUR 3.235 billion from 3.277 billion the year before. EBITDA slid 4.1 percent to EUR 1.269 billion, while the operating profit sank 10 percent to EUR 712 million. Net profit rose to EUR 591 million from EUR 449 million a year earlier, boosted by tax breaks of EUR 150 million aimed at stimulating innovation.
The ICT market remains challenging, KPN said. The operator cut its full-year EBITDA outlook to at least EUR 5.3 billion, from its previous forecast for profit growth from last year's figure of EUR 5.5 billion. The capex guidance for the year remains at EUR 2 billion, with a positive free cash flow. KPN confirmed it will propose a dividend at EUR 0.85 and a EUR 1 billion share repurchase programme for 2011. To help deal with the changing market conditions, the company plans to cut 4,000 to 5,000 jobs in the Netherlands by 2015, or around 20-25 percent of the workforce there. This will be done mainly through outsourcing and offshoring the back-office. The restructuring will cost an estimated EUR 250-300 million, which is not included in the 2011 profit outlook. The new CEO Eelco Blok will give more details on his strategy in a presentation on 10 May.
The CEO plans to accelerate investments in VDSL and mobile broadband. The mobile market is especially set to change, KPN said. The operator noted that 42 percent of postpaid customers now have a smartphone and 51 percent a data bundle. The popularity of apps has put pressure on voice and SMS sales. KPN wants to introduce new subscription forms focused on mobile data. KPN said it wants to distinguish itself from the rest with the quality of its services and its speed.
First-quarter revenues from the Netherlands fell to EUR 1.704 billion from 1.758 billion, pulled down by the changing consumer preferences. EBITDA for the Netherlands declined 2.2 percent to EUR 897 million. The consumer division saw sales go down 2.9 percent to EUR 941 million. Revenues at Business fell 5.4 percent to EUR 600 million, while at Wholesale, they dropped 4.0 percent to EUR 676 million. Getronics remained fairly stable with revenues at EUR 472 million, while iBasis grew 17 percent to sales of EUR 226 million. KPN Mobile International reported revenues for the first quarter at EUR 1.0 billion, up 0.1 percent year-on-year, while EBITDA fell 8.1 percent to EUR 353 million.
At the end of the quarter, the Dutch consumer mobile activities had 5.5 million connections, down by 95,000 from the end of 2010. The number of prepaid customers fell by almost 700,000 year-on-year to 2.3 million, while postpaid was up 2.3 percent to 3.2 million. ARPU was at EUR 24 per month, 4.3 percent higher than a year earlier. The mobile wholesale business had another 2.33 million customers, down from 2.43 million three months earlier. The business mobile customer base rose by 35,000 in the quarter to a total 1.81 million, while ARPU was down 10.4 percent from a year earlier to EUR 43.
Fixed consumer line losses amounted to 98,000, for a total 1.59 million at end-March, under pressure from WLR and aggressive promotions in the cable sector. VoIP lines rose by 26,000 in the quarter to 1.33 million. The number of broadband connections decreased from the previous quarter, to 2.569 million from 2.576 million. The number of Digitenne TV connections also fell from Q4, to 882,000 from 895,000. Meanwhile, IPTV grew in the quarter by 58,000 to 360,000 connections. Reggefiber now passes 693,000 homes, including 50,000 connections for KPN, and 148,000 for other providers.
