THE HAGUE, The Netherlands -- OPTA, the Dutch Telecommunications regulator, today announced that it will impose a fine of EUR 17 million on KPN following the conclusion of its investigation into discounts given by KPN to certain fixed telephony business customers. KPN will not appeal against the decision.

Furthermore, without admitting any liability and with the sole purpose of drawing a line under the matter, KPN has offered EUR 18 million to competitors. OPTA has taken this offer into account in establishing the fine.

On October 11, 2004, KPN informed OPTA about the discounts while the Supervisory Board's Audit Committee, with the full support of KPN's Management Board, launched an independent investigation. The outcome of the independent investigation was published on December 22, 2004, and confirmed KPN's earlier estimates that the value of the discounts in question was approximately EUR 20 million in aggregate , paid over the period 2003 and 2004.

Since that time KPN has significantly strengthened its internal controls and compliance procedures, started an intensive employee-training program and has appointed a compliance officer.

The Board of Management intends to appoint Eelco Blok, who currently heads Strategy and Innovation, in a senior operational position in the near future. Eelco Blok, formerly member of the Board of Management, decided to step down from the Board in December 2004 following the investigation.

KPN Telecom NV