KPN on Thursday reported a 3.9% decline in first quarter revenue as ongoing struggles at its enterprise division offset a stable performance at its consumer operation.
The Dutch incumbent generated €1.9 billion of revenue in the three months to 31 March, compared to €2 billion a year earlier. EBITDA fell 3.4% to €603 million, while operating profit fell to €165 million from €179 million.
Operationally, KPN’s performance was more encouraging.
The telco ended the quarter with 7.6 million mobile customers, up 4% on Q1 2014. Its fixed broadband customer base increased 2.7% to 2.8 million, while TV subscribers grew 7.6% to 2.1 million, driven by strong demand for its IPTV service. The proportion of KPN’s fixed-line customers signed up to a triple-play bundle increased to 52% from 46% last year.
KPN also offers bundles of fixed and mobile services, which saw uptake grow to 539,000 from 235,000 in the 12 months to 31 March.
"We are simplifying our product portfolio and lowering our costs, while adapting and innovating our services to give the best quality and value to our customers," said KPN chief executive Eelco Blok, in a statement.
Revenue at KPN’s consumer mobile and consumer fixed businesses was broadly flat, coming in at €344 million and €483 million respectively, compared to €347 mil lion and €483 million respectively a year earlier.
However, the same could not be said of KPN’s enterprise division, which continues to struggle and saw first quarter revenue fall 6.8% to €680 million.
Customer rationalisation and optimisation meant the size of the Dutch business market continued to shrink, KPN said.
"As we look ahead to the remaining three quarters of 2015 we do see challenges in our markets, notably in the Dutch business segment," Blok admitted.
Last week, KPN agreed to sell its Belgian mobile unit Base to Telenet for €1.3 billion in cash.
On Thursday, Blok said the deal "shows that we are committed to create further shareholder value."
KPN has tweaked its full-year guidance to exclude Base, resulting in a 2015 capex forecast of less than €1.3 billion, compared to its earlier outlook of less than €1.4 billion. From Q2, Base will be reported as a discontinued operation. All other forecasts, such as stable adjusted EBITDA and free cash flow growth, remain unchanged.
