OPTA Fines KPN

THE HAGUE, The Netherlands -- The Commission of the Dutch Independent Post and Telecommunications Authority (OPTA)has imposed fines totalling EUR 2.88 million on Koninklijke KPN N.V. The reason for this is thatKPN has failed to report agreements with two customers active in the wholesale market toOPTA. This was revealed when OPTA launched an investigation following a complaint filed bya market party. This investigation found that the services offered in these agreements wereunacceptable, because they were discriminatory and were not transparent. Since KPN wronglyfailed to report the relevant services to OPTA, the regulatory authority was unable to performits duties properly.

Due to the position of power it holds, KPN is bound by specific pricing regulations, amongst otherthings, in order to give its competitors a chance to compete on the fixed telephony market. By meansof these agreements, KPN granted the two companies in question selective tariff discounts and wasable to retain them as customers. As a result, KPN restricted competition. The turnover generated bythe two types of services amounted to approximately EUR 4.5 million during the period from thebeginning of 2006 until mid-June 2007, when OPTA caused the agreements to be terminated bymeans of conditional penalty.

Since the agreements were not reported, OPTA was prevented from performing its duty to regulatethe market. Chris Fonteijn, OPTA’s Chairman, has this to say about the matter: “KPN has previouslybeen fined for similar contraventions and could therefore have known better. This has led to the finesbeing raised. In order to prevent these types of contraventions from occurring in the future, we areconsulting closely with KPN about compliance programmes, which should guarantee propercompliance with the law.”

KPN Telecom NV (NYSE: KPN)