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KPN consumer mobile and broadband subscribers fall in Q1

Dutch telco KPN reported that its Q1 2020 revenues declined 2.4% year-on-year to EUR1.329 billion (USD1.443 billion), adjusted for impact of divestments, as growth in wholesale and B2B integrated services was offset by ‘continued pressure on fixed voice and mobile services’ and lower revenues from KPN Consulting (a division which KPN has now divested, with the sale completing on 1 April 2020). Q1 adjusted EBITDA (after leases) increased 2.1% y-o-y to EUR575 million as the effect of lower revenues was offset by EUR38 million net indirect operational expenditure savings. Quarterly net profit of EUR120 million was EUR31 million higher y-o-y, mainly driven by higher EBITDA and lower finance costs as a result of lower gross debt.

Q1 CAPEX increased by 6.3% y-o-y to EUR278 million on accelerated fibre rollout and mobile network modernisation. KPN’s fibre programme saw an additional 58,000 households passed by its fibre-to-the-home (FTTH) network in January-March 2020, having added 177,000 homes to the footprint since the start of the project in 2019, and reaching 2.52 million FTTH homes passed by end-1Q20 (around 30% household coverage of the Netherlands, aiming for over 40% by end-2021). 23,000 homes activated FTTH services in 1Q20, bringing KPN’s total to 1.287 million FTTH customers. It launched a 1Gbps FTTH service in selected cities in March 2020.

KPN’ total consumer post-paid mobile subscribers fell by 13,000 during 1Q20 to 3.575 million, whilst a full focus on the main KPN brand (with main sub-brand Telfort finally ceasing its mobile services in January) saw KPN-branded post-paid consumers rise by 24,000 during the same period. Consumer fixed broadband subscribers dropped by 25,000 to 2.823 million in the quarter, driven by brand strategy (note that Telfort continues to offer broadband services for now, but its closure is expected soon) and increased competition.

KPN says that it expects to have better visibility on potential operational and financial impact of the COVID-19 situation at the end of Q2 2020.

―Comms Update

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