KPN reports profit drop, blames Internet phone apps

Jul 26, 2011
Dutch telecoms operator KPN reported an 11.0-percent drop in net profit to 414 million euros for the second quarter on Tuesday, blaming the rise of Internet-based telephone applications.

Dutch telecoms operator KPN reported an 11.0-percent drop in net profit to 414 million euros for the second quarter on Tuesday, blaming the rise of Internet-based telephone applications.

Analysts had expected a figure of about 441 million euros ($638 million US) as polled by Dow Jones newswires.

"The market and regulatory headwinds we have experienced in quarter one continued to affect our in the , notably in our domestic business," said KPN's chief executive Eelco Blok in a statement.

KPN's fall in revenue was particularly due to a "change in ," in the sector, KPN said.

Users increasingly favoured Internet-based telephone applications such as Skype, instead of making traditional telephone calls or sending SMS messages.

The group's turnover also fell by 1.9 percent compared to the same period last year from 3.35 billion euros to 3.29 billion euros. In the Netherlands, which accounts for more than half of KPN's revenue, sales have dropped by 2.6 percent.

KPN previously suggested it should charge its customers to use Internet-based applications such as or WhatsApp, but the Dutch parliament in June adopted a law guaranteeing "Internet neutrality", sinking proposed plans by KPN and other service providers.

The company then opted for a rates increase to access the Internet via its mobile phones. The increase was set to kick in from September.

KPN which employs around 30,000 people, in April said it would cut 4,000 to 5,000 jobs in the Netherlands between 2011 and 2015 as a result of "negative trends" in its market.

It had already shed 10,000 jobs around the world between 2005 and 2010.

The company did however show a 7.5-percent rise in growth in Germany through its mobile phone subsidiary E-plus and 7.8 percent increase in growth in Belgium through another mobile phone subsidiary called BASE.

Explore further: Sony forecasts $2B loss as smartphones lag (Update)

add to favorites email to friend print save as pdf

Related Stories

Dutch parliament approves mobile 'net neutrality'

Jun 22, 2011

(AP) -- The Dutch parliament approved a bill Wednesday forcing mobile Internet providers to let customers use Skype and other rival services on their networks without charging extra or giving preferential treatment to their ...

Philips posts surprise profit as cost cuts help

Oct 12, 2009

Dutch electronics giant Philips reported on Monday a surprise profit for the third quarter as a series of cost cutting measures to cope with the global slump helped the bottomline.

Dutch selloff of KPN fans takeover fears

Dec 07, 2005

Few industries have been directly affected by sweeping technological changes than the telecommunications sector, but it has also remained one of the most closely controlled by the public sector worldwide. European telecommunications ...

Recommended for you

Sony forecasts $2B loss as smartphones lag (Update)

14 hours ago

Sony expects its annual loss to swell to $2 billion and has canceled dividends for the first time in more than half a century after writing down the value of its troubled smartphone business.

Alibaba post-IPO structure gives insiders control

14 hours ago

Control over Alibaba Group will stay in the hands of founder Jack Ma and other company veterans after the Chinese e-commerce giant goes public on the New York Stock Exchange in a record busting share sale.

User comments : 0