KPN Strategy Update 2020

24 November 2020 - The company

KPN is fully commited to fiber for the Netherlands

The number of fiber connections will double by the end of 2025 and KPN will keep going after that

To accelerate digitalization in the Netherlands, KPN is investing approximately 3.5 billion euro in the next three years. KPN will double the number of households with super-fast internet via fiber by the end of 2025. And after that, KPN will also continue to renew its network by replacing copper with fiber, so that, in the long term, more than 80% of the Netherlands will have access to a connection with the speed of light and can benefit from the hyper-connected society. KPN announced this today at the presentation of the Accelerate to Grow strategy update.

“Good connections have never been more important than now," says KPN CEO, Joost van Farwerck. "Never before have so many people worked from home. The Netherlands is gaining digital momentum due to COVID-19 and the call for secure, reliable and fast internet is increasing. In the future, more and more devices in and around the home will be directly connected to the internet and all kinds of essential services – from healthcare to education – will be digitally supported. Then, fiber is essential.”

The Netherlands is going digital
Currently, KPN offers fiber to the meter box in a third of Dutch households. From next year, approximately 500,000 new lines will be rolled out annually, a record number. In three years’ time, more than half of the Netherlands will have KPN fiber in their meter box, by 2025 this will be around 65%. Fiber offers the highest possible up and download speed and is a more stable and reliable network that uses less energy. Together with KPN’s completely renewed mobile network with 5G, this forms the most modern and powerful network, which the Netherlands can build on well into the 21st century.

“Our strategy is not so much a course change, more a course acceleration," continues Joost Farwerck. We are accelerating, just like the digitalization of our society. We’re accelerating the installation of fiber, we’re improving digital customer experience and we’re renewing our way of working. In doing so, we’re helping the Netherlands with the digitalization that is underway and we’re allowing KPN to grow again.”

Open network
KPN has traditionally opened its network to competing providers to offer telecom services. KPN will continue to do this. This offers consumers and companies greater freedom of choice and ensures that the capacity of the network is better utilized. In turn, this supports our investment in the accelerated installation of fiber, enabling the Netherlands to stay ahead digitally and allowing companies and consumers to get the best out of the hyper-connected society.

Digital & app-first
The needs and expectation of our customers are constantly increasing in this digitalizing society. KPN wants to offer customers an excellent digital experience and give them full control over the services they purchase from KPN. KPN is therefore fully committed to improving the MijnKPN app, for example. Consumers and small business customers can use it to manage their affairs easily, in accordance with the needs of their private or business situation. In this way, the MijnKPN app supports the strength of the Hussel range, whereby customers have maximum freedom of choice and the range is continuously enriched with new options. Together with its digital partners, KPN wants to open up a world of content, entertainment and gaming. Customers can easily add or stop content from digital partners such as Netflix and Amazon Prime to their telecom package via the MijnKPN app.

Preferred partner in digital life
Now that the vast majority of our SME customers have switched to future-proof technology, KPN will offer them a similar experience and service as consumers. By further simplifying and digitalizing customer processes, business customers will soon also be able to put together their own digital service package online, from standard modules. Delivery is lightning fast, the delivery costs are decreasing and the customer experience continues to improve. Additionally, business customers can choose from supplementary services from numerous partners in the field of security, cloud and workspace. As a one-stop-shop for entrepreneurs, KPN expects the revenue from the SME segment to stabilize by the end of 2021.

Growth
KPN has built a strong position in the consumer and SME segments, both directly via its own brands and via its wholesale channel. Together, these account for 75% of the service revenue and 90% of the EBITDA AL. The number of customers opting consciously for fiber internet is already growing. Partly as a result of this, KPN expects to achieve a joint revenue growth in these segments by the end of 2021, among other thing by the accelerated rollout of fiber.

A healthy financial position
In recent years, KPN has worked on a healthy financial position and profitability. This gives the financial scope to offer shareholders a dividend that will grow annually by 3-5% in the coming years. KPN is able to finance all investments and a growing dividend from its own revenues, while maintaining its healthy position. This way, KPN looks after the interests of all its stakeholders with its Accelerate to Grow strategy.

For more information, KPN’s expectations for 2021 and the financial ambitions for the period 2021-2023, click on ir.kpn.com.

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