Falling profits at KPN: job cuts to come

1 Mar 2005

KPN has reported that revenue and net profit in the fourth quarter of 2004 fell compared to the corresponding period of 2003. This contributed to full year declines in net sales and net income of 1% and 45% to EUR11.7 billion and EUR1.5 billion respectively. In terms of net sales, a slump of just over 6% at the Dutch telco’s wireline division failed to offset growth of 6% by its wireless subsidiary. The KPN mobile unit accounted for 44% of the group’s revenue in 2004 (up from 41% a year ago).

KPN plans to shed between 1,500 and 1,750 jobs in each of the next three years, mainly at its wireline division. The company claims that the move to an IP backbone, which is set to begin in earnest in 2005, means that services can be delivered with considerably fewer employees. The headcount reduction is expected to generate total savings of EUR450 million by 2007. A further 3,000 jobs are likely to go before 2010 when the company completes the move towards an all IP access network.

At the end of 2004, the group had 17.2 million mobile customers spread across the Netherlands, Germany and Belgium, up from 14.7 million at the end of 2003. PSTN plus ISDN connections fell by 3% to 7.4 million, while the number of KPN ADSL connections almost doubled to 1.4 million.

Netherlands, KPN, KPN Mobile (duplicate - do not use)