Feeds

KPN trades fixed line for IP telephony

Goodbye to POTS

Boost IT visibility and business value

Dutch telco KPN joins BT by turning off its public switched telephone network (PSTN) in less than three years. Eelco Blok, the CEO of KPN's fixed network, told German magazine WirtsschaftsWoche it will abandon its 100 year-old fixed line network in 2010 in favor of IP telephony.

By ripping out its legacy networks, including traditional telephone exchanges and copper wires, and replacing it with a nationwide fibre-to-the-kerb system that will deliver broadband services at 30-50 megabit speeds, KPN hope to drastically reduce costs. The group expects it can lay off 8000 workers, almost half of its fixed network work force.

In the UK BT announced similar plans to phase out its public switched telephone network (PSTN), replacing it with a multi-service internet protocol (IP) based network which will carry both voice and data services.

Plans for its ambitious All IP project were already outlined last year, but KPN didn't say it would end its traditional phone business that soon. "We need to because we face fierce competition," Blok told WirtschaftsWoche.

KPN is rapidly losing customers to Dutch cable operators which offer telephony at low prices. Sales of its fixed line business in 2006 dropped 3.4 per cent, despite adding over 500.000 VoiP customers.

KPN today reported an 8.9 per cent rise in 2006 net profit, which disappointed investors. Full year earnings are up slightly from €1.45bn to €1.5bn. Broadband continued to grow in Q4 with VoIP as the key driver. KNP's mobile telephone division, which includes E-Plus in Germany and Belgian provider Base, reported a 12 per cent rise in sales to € 6.45bn, nearly half of all KPN's revenues.

For 2007 KPN expects flat earnings and operating results. The migration to the all-IP platform and the merger of the firm’s fixed line and mobile operations by 2010 would place a drain on earnings, CEO Ad Scheepbouwer warned, but the sale of real estate and more than 4,000 job cuts would balance those investments. ®

The essential guide to IT transformation

More from The Register

next story
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Canadian ISP Shaw falls over with 'routing' sickness
How sure are you of cloud computing now?
Don't call it throttling: Ericsson 'priority' tech gives users their own slice of spectrum
Actually it's a nifty trick - at least you'll pay for what you get
Three floats Jolla in Hong Kong: Says Sailfish is '3rd option'
Network throws hat into ring with Linux-powered handsets
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
Trans-Pacific: Google spaffs cash on FAST undersea packet-flinging
One of 6 backers for new 60 Tbps cable to hook US to Japan
Tech city types developing 'Google Glass for the blind' app
An app and service where other people 'see' for you
UK mobile coverage is BETTER than EVER, networks tell Ofcom
Regulator swallows this line and parrots it back out at us. What are they playing at?
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.