World VoIP NewsKPN wouldnt sell local mobile unitKPN wouldnt sell local mobile unit

KPN wouldnt sell local mobile unit


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Ad Scheepbouwer, the CEO of Dutch telecoms group KPN, has told Reuters that the company is committed to the German wireless market and will not sell its local mobile unit E-Plus.
The cellco has about half the market share of Deutsche Telekom’s mobile arm T-Mobile Deutschland and UK-based Vodafone in Germany, but concerns have grown that it is not investing enough in the country to keep its place and that it might have to sell the cash-generating business, possibly to Spain's Telefonica. ‘We have earned a third spot in the German market with our strategy. With our current and newly acquired frequencies, we expect to maintain that position ... by ourselves,’ Scheepbouwer stated. KPN is targeting a market share of between 20% and 25% in Germany over the next three to five years, up from the current 15%, but will avoid making capital investment beyond existing plans over the coming years, he added.

In the German mobile spectrum auction, which concluded last month, E-Plus was the only cellco to walk away without spectrum in the lucrative 800MHz band, suitable for the provision of Long Term Evolution (LTE). The company was able to double the amount of spectrum its holds however, and Scheepbouwer said that with two additional blocks in the 2.1GHz band, E-Plus will be able to fight competition by offering capacity rather than a new technology. Although Scheepbouwer thinks KPN is in no need to cooperate with other mobile operators after the spectrum auction, he said he would always be open to partnerships: ‘We do not need cooperation based on our current package. But we will always investigate whether things can be done cheaper with others, but at the moment this is not necessary.’

Analysts say KPN's position in Germany may be at risk after competitors snatched the most popular bands in last month's German mobile spectrum auction.

E-Plus doubled its amount of spectrum in the auction, but it was left without access to the popular 800 Mhz band.

Impression Chief Executive Ad Scheepbouwer said with two additional blocks in the 2.1 GHz band, E-Plus was able to fight competition by offering capacity rather than a new technology.

Scheepbouwer expects KPN can optimize and expand its network, without raising annual capital investments.

"We annually spend about 2 billion euros on capital investments, of which about 750 million euros internationally," he said. "Most of the time we don't even reach that amount. I don't expect us to change our capex framework in the coming years."

Last year KPN invested about 450 million euros in Germany, 12 percent less than in 2008.

"We have increased commercial activity this year, which puts pressure on margins. So far we have been able to compensate that operationally ... In recent quarters our (EBITDA) margin at E-Plus has been above the 40 percent, and whilst it may drop a couple of points, I certainly don't expect to go below 35 percent, a level we have been above for the last five years."

Although Scheepbouwer thinks KPN is in no need to cooperate with other mobile operators after last month's spectrum auction, he said he would always be open to partnerships.

"We don't need cooperation based on our current package. But we will always investigate whether things can be done cheaper with others, but at the moment this is not necessary", Reuters reports.


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