Having spent 10 years achieving a turnaround in KPN's fortunes, CEO Ad Scheepbouwer highlighted possible expansion opportunities for the company that should appear in the next few years.
According to Scheepbouwer, who stepped down from the CEO post this week, acquisition opportunities should come from two sectors. First, he said European governments are looking to reduce their debt burdens by selling their remaining holdings in former state-owned telecoms operators, "and it's much easier [for them] to sell assets than to raise taxes or lower subsidies," Scheepbouwer told Dow Jones Newswires.
He also suggested that other large telecom operators in Europe would reorganise and adjust their asset portfolios, which could see them divesting minority shareholdings--as seen this week with Vodafone.
"They will start to rationalise. This will cause a certain consolidation, because they will have to start managing their assets lean and mean," Scheepbouwer said, while indicating that some of Europe's smaller operators, such as Belgacom and Telekom Austria, would look to merge or make acquisitions to compete more effectively.
KPN presently generates 70 per cent of its revenues from its home market in Holland, with its Base (Belgium) and E-Plus (Germany) operations providing the remaining 30 per cent. These two subsidiaries have market shares in each country of 18 per cent and 15 per cent, respectively, and Scheepbouwer said KPN should look to build this market penetration to between 20 per cent and 25 per cent in the longer term.
While Scheepbouwer expects mobile data to grow into a huge market, he warned that 2011 could be a difficult year as European telecoms operators become further constrained by regulation. "This year we'll lose €500 million in sales due to regulation," he said. In addition, "as a result of mobile Internet there is a little bit less mobile phone traffic and a bit less text messaging."
- see this Dow Jones Newswires article
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