KPN announces return-to-growth targets, accelerated fibre strategy

25 Nov 2020

Dutch fixed and mobile operator KPN has announced financial growth targets alongside accelerated nationwide fibre rollout plans. In particular, the company expects total service revenues in Consumer, SME and Wholesale to return to growth by end-2021. CEO Joost Farwerck said: ‘With the majority of our revenues and EBITDA generated in the Consumer and SME segment, also through our Wholesale partners, we are primarily a mass-market service company. Our aim is to grow these mass-market service revenues by end-2021 through a growing customer base and by offering differentiated services and an outstanding digital experience to families and businesses.’ KPN adds that its ‘next wave of simplification and digitalisation’ will deliver additional cost savings of at least EUR250 million (USD297 million) in 2021-2023, while it also aims to ‘drive the digitalisation of services across sectors from health care to education.’ KPN’s 5G strategy, meanwhile, includes a strong focus on differentiated services for B2B customers in specific industries.

KPN currently covers one-third of the Netherlands’ households with direct fibre and expects to add approximately 300,000 fibre homes passed in FY 2020. It will accelerate its fibre rollout to approximately 500,000 additional homes passed per year, to cross the 50% household coverage mark in 2023 and reach approximately 65% of Dutch homes by 2025.

In 2021 KPN expects to invest EUR450 million-EUR500 million in the accelerated fibre rollout, compared to EUR270 million-EUR290 million in 2020. As a result, total 2021 CAPEX will rise to EUR1.2 billion from 2020’s EUR1.1 billion. In the years 2022 and 2023 KPN expects CAPEX of EUR1.1 billion-EUR1.2 billion, with fibre investments maintained at an elevated level. Furthermore, KPN expects adjusted EBITDAaL (EBITDA after Leases) to grow in 2021 and reach a level of more than EUR2.45 billion in 2023, compared to a forecast of about EUR2.32 billion in FY20, driven by growing mass-market service revenues and continued cost savings.

Netherlands, KPN