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KPN 2019 analyst day: the company is changing its strategy after M&A fails to deliver revenue growth

Tom Rebbeck Research Director, Operator business services and IoT

"KPN's strategy has shifted from a focus on creating new opportunties to a more-modest aim of stabilising service revenue between 2019 and 2021."

The mood at KPN's 2019 B2B analyst event contrasted with that of previous years. In 2017 and 2018, the company explained that it was focused on creating new opportunities and returning to growth. However, in 2019, cost-cutting and rationalisation are its priorities. In 2017, KPN set a target of 2019 as the year when it expected business revenue to return to growth. The more-modest aim today is to stabilise service revenue between 2019 and 2021, with EBITDA stabilising by mid-2020 and growing thereafter.

Developments at KPN have implications elsewhere. Although the company's pursuit of M&A to counter declines in core revenue has been more aggressive than other operators, this approach has also been adopted by Telstra, Telia Finland and others. If this strategy does not deliver sustainable revenue growth for KPN, it may also raise difficult questions for others with similar plans.