Strategy 'Back to Growth'
Our ‘Back to Growth’ strategy will return KPN to growth in the period 2008 to 2010, both in terms of revenues and EBITDA.
As with the launch of ‘Attack-Defend-Exploit’ in 2005, the ‘Back to Growth’ strategy follows an extensive strategic review and has been devised to address the challenges of today’s telecoms markets. With this ‘Back to Growth’ strategy, KPN will remain a top performer among European telecom operators and will continue to be a front-runner in the sector in identifying the market challenges, and setting strategic benchmarks accordingly.
Growth will be the result of the Netherlands reaching inflection, continued growth at Mobile International and additional growth from recent acquisitions, as will be achieved with Getronics and iBasis. Growth is set to be achieved in the face of regulatory tariff reductions and the impact of shrinking traditional wireline services in the Netherlands. Key components of the strategy are the ramping up of new services launched in recent years and cost reductions.
In the period to 2010 the Netherlands business will undergo a radical transformation. The All-IP network announced in March 2005 will move into its final phase with the implementation of a new access network. In addition, KPN will pursue a radical simplification of its business, both at the front-end in retail segments and at the back-end in network operations. The significant cost reductions that will be generated by this simplification will be used firstly for re-investment in revenue growth, leading to acceleration of recent growth initiatives, such as broadband and TV in Consumer and IP-based services in Business. Secondly, cost reductions will lead to margins improving.
We’ve set the following ambitions for 2010 for the Consumer segment in the Netherlands:
Strengthen position as leading Consumer service provider.
- Market share growth in broadband and strengthening wireless
- Reach inflection in EBITDA
- In the back to growth strategy we’ve identified strategic building blocks along which we will execute our strategy.
First of all, we will continue our strong customer focus, with a specific focus on subscriber and ARPU growth, driving revenues.
- Furthermore, we focus on growth in wireless services, where we expect to see acceleration in minutes and data, despite MTA and roaming cuts.
- Then, stopping line loss in PSTN and ISDN is one of our key priorities, for which dual play and TV offerings will be used.
- We will further progress the fiber roll-out with a mix of Fiber-to-the Curb and Fiber-to-the-Home.
- We will simplify our multi-brand portfolio into three main brands for all our propositions: KPN, Hi, and Telfort.
Cost reductions will come from headcount reduction, first time right and simplification.
For a more detailed explanation of our strategy we refer to the strategic update.
For the Business market, we have set the following ambitions for 2010:
Leading managed ICT service provider.
- Preferred Business market supplier
- Revenue growth with ‘best-in-class’ margins
- In the back to growth strategy we’ve identified strategic building blocks along which we will execute our strategy.
Strategic building blocks to return to EBITDA growth
We take customer focus as a starting point, in order to become the preferred Business market provider.
- We leverage our market leading positions, by focusing on market share growth and cross- and upselling opportunities
- We migrate our business to the All-IP platform, through which we will offer IP-based services Fibre-to-Office.
- Furthermore, we will move up the value chain towards managed ICT-services. The Getronics acquisition is instrumental in achieving this goal
- Portfolio simplification allows us to phase-out legacy services. Customer demand will remain the principle for this process.
- Cost reductions will be obtained through this simplification, increased productivity and lower IT costs.
For a more detailed explanation of our strategy we refer to the strategic update.
For the Wholesale & Operations division, we have set the following ambitions for 2010:
‘Best-in-class’ network operator with very high productivity.
- Network based on IP Growing wholesale business
- In the back to growth strategy we’ve identified strategic building blocks along which we will execute our strategy.
- We deploy a proactive network roll-out and infrastructure sharing through an open access model
- The migration to all-IP allows a radical simplification of the business in processes and IT
- Simplification will also lead to substantial cost savings and additional FTE reductions.
- Lastly, the merger between KPN Global Carrier Services and iBasis creates a growth platform for international wholesale.
Strategic building blocks to return to EBITDA growth
For a more detailed explanation of our strategy we refer to the strategic update.
Mobile International intends to continue the path of profitable growth. The ambition for 2010 is:
E-Plus outperforming competition in growing German market
- Re-igniting growth in Belgium with broader scope
- Selective expansion in Europe
- In the back to growth strategy we’ve identified strategic building blocks along which we will execute our strategy.
we will follow a multi-brand strategy with specific brands for each segment
- In addition to our own brands, we have partnerships where we operate as a committed wholesale partner
- To achieve the lowest cost base we continue to reduce costs where we can
- In the future we will meet growing demand in wireless data
- In selective markets in Europe, we will pursue additional value-creating opportunities
Strategic building blocks to return to EBITDA growth
For a more detailed explanation of our strategy we refer to the strategic update.
