Wednesday, April 27, 2011

KPN takes a leaf out of Telefonica's book

There are some striking similarities between KPN's recent profit warning (April 21), Telefonica's Investor Days (13-14 April) and Telefonica's report on dropping voice and SMS income (January 11). This may lead to speculation over two things:
  1. Details of KPN's Investor Day (May 10).
  2. The possibility of a merger (again).
As to #1:
  • Revenue CAGR: Telefonica 1-4%, KPN tba.
  • EBITDA-margin: Telefonica high 30s, KPN tba.
  • Revenue mix: Telefonica voice + access from 75 to 64%, BB from 8 to 25%, VAS from 5 to 9%. KPN tba.
  • Home market job reductions: Telefonica 20%, KPN 20-25%.
  • Focus for both: fixing mobile broadband propositions, differentiating tariffs including VoIP, chat, email, socail networking, browsing.
As to #2:
  • Telefonica said that "LTE is a three-player market". This suggests that it feels that E-Plus in Germany isn't there to stay.
  • KPN's previous CEO Ad Scheepbouwer said that only two companies could logically launch an offer for KPN: Telefonica and France Telecom. The latter seems out of the question: it is cozying up to Deutsche Telekom (network sharing UK and Austria, joint procurement, more to come) and wouldn't want to start competing on the German market (DT left the French market years ago). Also, that wouldn't reduce the number of mobile players to 3.
  • Conclusion: an offer from Telefonica still makes sense.

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