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Den Haag, 9-1-07

KPN will reduce the number of retail formulas it deploys in the Netherlands in order to better align its high street presence with its existing brands. This is intended to increase KPN’s distribution power and reduce costs. As a consequence, KPN has decided to withdraw the Kral and KPN Klick formulas this year to fully focus on the KPN (Primafoon and Business Center), Hi and Telfort brands. KPN expects that approximately half of the existing 53 Kral and 4 KPN Klick shops will be able to continue operations under one of the KPN brands. The remaining locations will be closed in due course. The intention is to place as many personnel as possible in other KPN outlets.

Last year, KPN already decided that the youth-focussed “kpn five seven six” (kpn576) shops would be subsumed in its Hi-branded chain of stores. Besides the Kral and KPN Klick shops, KPN now operates 104 KPN Primafoons, 18 KPN Business Centers, 2 Hi stores and 2 kpn576’s (shortly to become Hi). There are also 16 Telfort shops. The number of Hi and Telfort shops will be further expanded this year.

It is KPN’s contention that the previously separate domains of photo, video and TV on the one hand and telecommunications on the other are increasingly converging. During the pilots with the KPN Klick formula, digital photo and video were combined with KPN’s telecom products and services. Drawing on the success of the KPN Klick-pilots, KPN will accelerate the rollout of these combinations to other formulas, consequently reducing the potential relevance of a dedicated formula.