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KPN considers options for sale of BASE in Belgium

16 Apr 2012

Dutch incumbent KNP Telecom (or Royal KPN) is considering the sale of its Belgian mobile unit BASE, in a deal that could generate up to EUR1.8 billion (USD2.3 billion) for the company, Bloomberg reports citing people familiar with the situation. BASE is Belgium’s third largest carrier by subscribers and could attract interest from a number of potential bidders, including private equity groups such as Apax Partners. The unconfirmed sources claim that talks over a possible deal are at a preliminary stage, but that details on a formal auction process may be established in time to be sent to interested parties in May. The Netherlands’ largest telecoms group by revenue and subscribers released a statement which read: ‘KPN is conducting a comprehensive review of the strategic options in respect of its mobile operations in Belgium … The outcome of this strategic review is not yet clear and further announcements will me made.’

KPN is struggling to staunch falling turnover and declines in its profits and market shares in its fixed line and mobile operating segments. In January this year it reported a 63% year-on-year decline in net income for its fourth quarter ended 31 December 2011, attributable to competition in its home market and the impact of impairment charges related to its IT services business Getronics. The telco reacted to the weak results by lowering its outlook for FY2012 – a period it sees as one of transition in an unstable macroeconomic climate – and accelerating a restructuring program that will cost between 4,000 and 5,000 jobs. In 2012 the Dutch group is forecasting free cash-flow in a range of EUR1.6 billion-EUR1.8 billion, down from its previous target of around EUR2.4 billion. EBITDA is seen also down from 2011 levels in a EUR4.7 billion-EUR4.9 billion range. KPN is also scrapping its 2012 share buyback programme it said, and instead will expand its investment strategy to reverse its fortunes in its home market. Finally, KPN also said it will sell the international division of Getronics – which booked sales of EUR565 million last year and employs 4,900 staff. Last year KPN sold its France Simyo-brand mobile virtual network operator (MVNO) to Bouygues Telecom and is reportedly in talks to offload its Simyo-brand in Spain.

Belgium, Netherlands, BASE Company, KPN

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