The Dutch operator raised its outlook for 2015 to adjusted EBITDA in line with 2014, capex of less than EUR 1.3 billion and free cash flow of over EUR 500 million. In addition the company expects to receive a dividend from its stake in Telefonica Deutschland. KPN's own dividend for the year is forecast at 8 cents a share, with an interim payment of 3 cents in September, and the dividend should increase in 2016. In addition KPN will pay a special dividend of 3.4 cents a share from the dividend received from Telefonica Germany for 2014.
Consumer
At KPN's consumer business in the Netherlands, quarterly revenues rose 0.4 percent to EUR 478 million, while EBITDA fell 0.9 percent to EUR 105 million. KPN profited from price increases last summer but the costs of growing the customer base put pressure on EBITDA. Inthe three months to June, the company added 31,000 broadband customers and 64,000 new IPTV subscribers, giving KPN market shares of respectively 40 percent (stable) and 28 percent (higher). ARPU increased by 2.4 percent to EUR 43. KPN also added 61,000 triple-play customers in the quarter, and a total 608,000 customers now take both fixed and mobile services from the operator. Churn declined to 9 percent.
In the consumer mobile market, revenues rose 5.6 percent year-on-year to EUR 374 million, and EBITDA jumped 61 percent to EUR 82 million. Average data use per customer was 2.4 times higher at 1.1 GB per month among KPN customers, which now include the Hi customer base. Mobile service revenues rose by 3.1 percent, helped in part by a tax benefit. KPN estimates its market share rose to around 44 percent, after the addition of 70,000 retail postpaid subscribers in the quarter. ARPU was still down slightly to EUR 27 for postpaid due to lower out-of-bundle costs.
Business
In the business market, revenues fell 8.9 percent to EUR 662 million, and EBITDA dropped 20 percent to EUR 123 million. The number of fixed lines fell to 776,000 from 928,000 a year ago, while mobile lines rose by 5,000 in the three months. The operator said it suffered from price pressure in mobile services, with ARPU down to EUR 35 from EUR 38 a year ago. Revenues were down 19 percent in traditional voice, 12 percent in single-play mobile services and 6.1 percent in IT services.
KPN said it plans further efficiency measures, with an accelerated reduction in the workforce in H2. Growth is expected to come from multi-play subscriptions and new services such as cloud computing. The number of multi-play customers rose by 51,000 in Q2 to 421,000, and multi-play revenues were up 77 percent.
NetCo
At KPN's wholesale business NetCo, revenues fell 2.9 percent to EUR 544 million, while EBITDA rose 3.0 percent to EUR 314 million, helped by the consolidation of Reggefiber. FTTC and FTTH penetration increased to 57 percent from 47 percent a year ago, and the target is to reach 80 percent by the end of 2016. KPN now offers 100 Mbps to 60 percent of households, and this is expected to reach 85 percent by the end of next year.
On the mobile network, the average 4G speed increased to 36 Mbps, versus 20 Mbps a year ago, thanks to the deployment of carrier aggregation in the 800 and 1,800 MHz bands. Total data traffic increased from 500 GB per month at the end of 2014 to 2,200 TB in June.
