KPN Drops as Regulator Plans to Cut Tariffs: Amsterdam Mover
Royal KPN NV (KPN), the Dutch phone operator partly owned by America Movil SAB (AMXL), led decliners on the benchmark AEX Index after the Dutch Authority for Consumer and Markets ACM said it plans to cut mobile tariffs further.
KPN fell 11 cents, or 4 percent, to 2.75 euros as of 10:31 am in Amsterdam, adding to a decline of 4.15 percent yesterday. The shares have lost 26 percent this year, cutting the company’s market value to 3.92 billion euros ($5.12 billion).
The authority said it wants to lower tariffs in the next three years as of Sept. 1 to support competition in the underlying retail markets and drive the realization of an internal European market. Mobile tariffs will be reduced to 1.017 cents per minute from 2.4 cents and fixed line charges to 0.108 cents from 0.37 cents per minute, ACM said in a statement.
“This is definitely going to hurt KPN,” said Jos Versteeg, an analyst at Theodoor Gilissen Bankier, by phone.
Lower tariffs and changing consumer behavior have hit KPN’s sales in recent years. The company is also having to invest in faster mobile networks to keep pace with competitors as customers increasingly turn to smartphones to access the Internet, download music and watch videos.
The Hague-based KPN is preparing for a 3 billion-euro share sale as part of an effort to invest in operations and reduce debt. The Dutch carrier needs the money to strengthen its balance sheet after spending 1.35 billion euros on wireless spectrum in the fourth quarter.
KPN has received the draft decision for consultation and is studying the plans, KPN spokesman Stefan Simons said by phone.
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