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Eurobites: KPN Bombs in Business Sector

Paul Rainford
4/30/2015

Also in today's EMEA regional roundup: MegaFon revenue falls; Jazztel's on the up; French government slammed over Dailymotion deal.

  • Dutch incumbent KPN Telecom NV (NYSE: KPN) saw revenue slip 3.9% year-on-year in the first quarter, to €1.91 billion (US2.13 billion), while operating profit was also down 7.8%, to €165 million ($184 million). The carrier attributed some of the slump to declining revenues in its business segment, and it foresees further struggles in this segment for the rest of the year. KPN is in the midst of selling its Belgian mobile unit, BASE , to Liberty Global Inc. (Nasdaq: LBTY)-owned Telenet for $1.4 billion, but it's still too early for this to have affected the results. (See Telenet Buys KPN's BASE in $1.4B Deal.)

  • Russian telcos are facing tough times at the moment as the country's economy struggles in the face of sanctions, and MegaFon is no exception. It saw its first-quarter revenue fall 1.2% year-on-year, to 73.98 billion Russian rubles ($1.43 billion). In a clear sign of declining consumer confidence, handset sales dropped by 9.7%.

  • Spanish broadband provider Jazztel plc , which is the subject of a €3.4 billion (US$4.4 billion) takeover bid from Orange (NYSE: FTE), has seen its first-quarter EBITDA increase 16% year-on-year, to €58.5 million ($65.4 million), reports Reuters. (See Fiber Sizzles in Spain as Orange Targets Jazztel.)

  • The French government has been criticized by a major investor for derailing a potential deal between his investment group and online video firm Dailymotion , and allowing media conglomerate Vivendi to do a deal instead. Charles Brown, head of Lake House Group and a partner in a joint bid with Hong Kong's PCCW Ltd. (NYSE: PCW; Hong Kong: 0008) for a stake in Dailymotion, told the Financial Times (subscription required) that the government's conduct had made it unlikely that he and PCCW would seek to do further business in France in the near future.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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