KPN of the Netherlands reported a drop in first quarter revenues and profits, and said that rising earnings from its mobile operations failed to offset a decline in profits from fixed line services. In the three months to 31 March 2007 the Dutch incumbent recorded net profits of EUR313 million (USD425 million), down 18% from EUR383 million in the corresponding period a year ago. Revenues in the quarter dipped 2.6% to EUR2.92 billion as a loss in revenues from fixed line activities as customers switched to VoIP or mobile alternatives impacted badly on its performance. The falls were only partly aided by a one-time gain of EUR65 million relating to the sale of its satellite company Xantic in 2006. On a more positive note, the group’s German mobile unit E-Plus posted an operating profit of EUR75 million, after breaking even a year ago. The mobile operator ended the quarter with 13.1 million customers, up 15% year-on-year, although it still lags way behind market leaders Deutsche Telekom (T-Mobile) and Vodafone Germany. KPN said its net debt stood at EUR8.8 billion at 31 March 2007, down EUR400 million from a year ago.