Feeds

KPN loses faith in 3G, to dump Hutchison stake

At a knock-down price...

  • alert
  • submit to reddit

Top three mobile application threats

ComputerWire: IT Industry Intelligence

Dutch incumbent KPN NV plans to sell for a knock-down price its 15% stake in Hutchison 3G, which is due to pioneer 3G services in the UK in October, after a major reappraisal of the business plans of its mobile operations in Europe led it to write off 9bn euros ($8.7bn) from the value of its holdings.

While it paid approximately 1.5bn euros ($1.4bn) for its stake in Hutchison 3G, it has now written off 1.2bn euros ($1.16bn) from this investment, valuing the holding at 300m euros ($291m) and suggesting that the UK's fifth mobile operator is worth just 2bn euros ($1.9bn).

"This is a non-core asset and all non-core assets are up for sale but there aren't that many interested buyers," said chief executive Ad Scheeobouwer.

Hong Kong conglomerate Hutchison Whampoa Ltd, which owns a 65% holding in the company, along with Japanese giant NTT DoCoMo with 20%, said it was "deeply disappointed" with the decision.

But KPN, which has already slowed down its own migration to 3G, has also slashed 6.6bn euros ($6.4bn) off the value of its E-Plus German subsidiary. It has written off 3.9bn euros ($3.8bn) from the 8.4bn euros ($8.1bn) it paid for a German 3G license, and 2.7bn euros ($2.6bn) from goodwill in the operation.

While KPN expects to spend 1.4bn euros ($1.35bn) on 3G phone networks in the Netherlands, Belgium and Germany by 2005, the write-downs reflect a belief that 3G will not be the money spinner that carriers expected when they parted with billions for licenses.

KPN brought in an independent appraiser to look at the business plans of its mobile operations and looked to see whether their value in the company's books could be justified by the amount of revenue they will bring in over the years.

KPN is following the example of UK incumbent BT Group Plc in cutting debt levels accumulated during an ill-judged expansion program carried out by previous management.

In the second quarter to June 30, the net loss was 9.3bn euros ($8.9bn), up from a loss of 499m euros ($484m) on revenue of 3.1bn euros ($3bn), down from 3.2bn euros ($3bn). The current figure includes 7.4bn euros ($7.2bn) of amortization and impairments. KPN has brought its net debt down over the past 12 months from 22.8bn euros ($22.1bn) to 15bn euros ($14.5bn).

© Computerwire.com. All rights reserved.

Combat fraud and increase customer satisfaction

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Brit boffins use TARDIS to re-route data flows through time and space
'Traffic Assignment and Retiming Dynamics with Inherent Stability' algo can save ISPs big bucks
Microsoft's Nadella: SQL Server 2014 means we're all about data
Adds new big data tools in quest for 'ambient intelligence'
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.