KPN to hand back Telfort licences

3 Aug 2009

Dutch telecoms group KPN (or Royal KPN as it is also known) has said it will return two of its Telfort frequencies to the government following a recent judicial ruling that went against it. Last month CommsUpdate reported that Telfort, which is owned by KPN Telecom, lost its initial appeal seeking to overturn a ruling by the radiocommunications regulator Agentschap Telecom (AT) requiring it to use its UMTS spectrum. The Rotterdam court ruled in favour of the AT at the preliminary injunction case, meaning that Telfort could only use its own UMTS frequencies and not those held by its parent company. KPN reached an agreement to acquire Telfort for a total consideration of EUR980 million (USD1.17 billion) on a debt and cash free basis in June 2005. Since then it has been steadily moving Telfort’s 2.4 million subscriber base over to its own KPN Mobile network. The court upheld a EUR5 million fine imposed on Telfort by the AT for failure to use the spectrum and said it could impose further fines up to a maximum of EUR40 million for its continued breach of the law. The court further ruled that Telfort must provide an available UMTS signal, separate from KPN’s coverage, so that users could access the frequencies held by Telfort. The AT meanwhile, called on Telfort to relinquish the frequencies so they could be reassigned to other operators. KPN now says it does not want to take unnecessary financial risks and has therefore asked the economic affairs ministry to rescind two of its Telfort licences.

Netherlands, KPN