XS4ALL management decides to merge with KPN in line with KPN strategy

KPN presented the plans for a single brand strategy for the first time in January 2019.

The decision to merge KPN and XS4ALL stems from the developments in the market and the customers’ wishes, and is in keeping with the group strategy.

‘It has been an intensive process with detailed substantive discussions, and the management of XS4ALL showed understanding for the emotions evoked by the proposal. But after careful consideration we have reached the conclusion that a merger is in the interest of customers, employees, XS4ALL and KPN’, says Jörg Kramer, managing director of XS4ALL and Wouter Stammeijer, ExCo member and head of Strategy at KPN.

In line with strategy
Through this strategy, KPN aims to be the undisputed quality leader in the Netherlands, with the best services, service level and networks. To achieve this, KPN is expanding the Netherlands’ digital highway by rolling out fiber on a large scale in the coming years and by getting its 5G mobile network ready. KPN will thereby further digitize its services to offer customers the best experience at all times, wherever they are.

For many years KPN has operated a successful multi-brand strategy, with each brand having its own position in the market with specific characteristics. Over the last few years the difference between brands has been becoming less distinct in the market; nowadays the quality of the services they offer are increasingly similar.

Research has shown that the vast majority of customers want to have all the services under the same roof: internet, TV and fixed and/or mobile services. Customers want to be able to put their own package together, such as a package with basic TV channels, a lot of data but few minutes, and premium internet. These developments have meant that KPN as a group has opted to offer its all services under the KPN brand. With this strategy KPN can combine its forces and offer its customers the best of all its brands. Against the background of the market developments, the customers’ wishes and the strategy of the KPN group, XS4ALL has chosen to combine the best of XS4ALL with the KPN range.

The decision by XS4ALL, and previously by Telfort, to integrate with KPN has put KPN in a position to simplify its organization considerably. Instead of having separate platforms for KPN, Telfort and XS4ALL it can switch to a single platform. This allows capacity to be freed up more quickly for innovation and digitization and KPN can put new products on the market more quickly. That is a significant advantage in the very competitive Dutch telecom market. And by also opting to further roll out fiber in the Netherlands and to invest in 5G, KPN is making itself future-proof.

Careful process
The management and the Works Council of XS4ALL are going through a full advisory process in accordance with the Works Councils Act. The same applies on the KPN side – the receiving end.

On January 10, 2019 the KPN Central Works Council issued positive advice regarding the KPN group’s chosen strategic direction.

From the very earliest stage, the XS4ALL Works Council has been involved by its management – in the spirit of openness – in the preparations and the entire decision-making and advisory process. Four scenarios were carefully considered on the basis of criteria that were mutually agreed in advance. The XS4ALL management and Works Council made detailed calculations with respect to two of those four scenarios, with the help of internal and external experts. The comparison, which was subsequently validated externally, confirms the decision to integrate.

Special place
It is indisputable that in recent years XS4ALL has taken a special place in the development of the internet and has made a contribution to the debates about privacy and online security.

‘It is our intention to incorporate the strong points of XS4ALL in the KPN range, but for millions of customers, not just a small number. The role of the XS4ALL employees will be hugely important in that’, say Kramer and Stammeijer.

XS4ALL and KPN will only transition XS4ALL customers when KPN can offer them a comparable or better service. This is not expected to happen before the second half of 2020 at the earliest.