Royal KPN NV · EURONEXT:KPN
Royal KPN NV — KPN — H1 2010 Earnings Presentation
86 slides from Royal KPN NV's earnings presentation, Jul 27, 2010
Slide 1: Half Year Results 2010
Half Year Results 2010 27 July 2010
Slide 2: Safe harbor
Safe harbor Non-GAAP measures and management estimates This financial report contains a number of non-GAAP figures, such as EBITDA and free cash flow. These non-GAAP figures should not be viewed as a substitute for KPN’s GAAP figures. KPN defines EBITDA as operating result before depreciation and im
Slide 3: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 3
Slide 4: Highlights Q2
Highlights Q2 Profitability again improved through focus on EBITDA, FCF and market shares • Continued focus on costs, customer value and market shares in Dutch Telco leads to solid profitability • Service revenue growth and strong profitability at Mobile International • Good result German spectrum a
Slide 5: Financial highlights Q2
Financial highlights Q2 • Financial performance Q2 ’10 – Revenues and other income € 3,354m, down 1.7% y-on-y – EBITDA of € 1,386m, up 4.8% y-on-y – Capex of € 380m, in line with Q2 ’09 – Free cash flow of € 707m, € 935m YTD – Earnings per share of € 0.29, up 32% y-on-y • Continued focus on industry
Slide 6: Outlook
Outlook Outlook for 2010 and 2011 confirmed Reported 2009 Outlook 2010 • Higher revenues in H2 Revenues and other income € 13.5bn In line with 2009 y-on-y, excluding disposals • EBITDA growth of € 300m € 5.2bn > € 5.5bn for full year 2010 remains EBITDA Incl. real estate: Incl. real estate: unchange
Slide 7: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 7
Slide 8: Group results Q2 '10
Group results Q2 ’10 EBITDA on track to reach € 5.5bn for 2010 €m Q2 ’10 Q2 ’09 % YTD ’10 YTD ’09 % Revenues and other income 3,354 3,411 -1.7% 6,631 6,807 -2.6% Operating expenses 2,515 2,669 -5.8% 4,999 5,433 -8.0% 1 – of which Depreciation 351 391 -10% 699 783 -11% 1 – of which Amortization 196 1
Slide 9: Group cash flow Q2 '10
Group cash flow Q2 ’10 On track to meet full-year guidance of at least € 2.4bn free cash flow for 2010 €m Q2 ’10 Q2 ’09 % YTD ’10 YTD ’09 % Operating profit 839 742 13% 1,632 1,374 19% Depreciation and amortization1 547 580 -5.7% 1,077 1,182 -8.9% Interest paid/received -107 -124 -14% -366 -282 30%
Slide 10: Regulatory
Regulatory New MTA glide paths implemented in the Netherlands and Belgium • Draft proposal on MTA glide path from April 2010 has been modified by OPTA – Updated glide path implemented per 7 July 2010 – Limited effects for 2010, lower tariffs for 2011 compared to draft proposal – KPN is considering a
Slide 11: Pension update and collective labor agreement
Pension update and collective labor agreement New collective labor agreement in place; pension fund below 105% threshold • KPN pension funds in the Netherlands negatively impacted by declining interest rates and deterioration of financial markets Pension • Average coverage ratio of KPN’s pension fun
Slide 12: Group financial profile
Group financial profile Maintaining solid financial profile € bn Debt Financing policy 14.5 13.6 13.7 13.8 13.8 13.7 2.5x 2.3 2.3 2.3 2.3 2.0x 11.8 12.1 2.1 2.2 11.7 11.7 11.4 11.1 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Gross Debt Net Debt Net Debt / EBIT
Slide 13: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 13
Slide 14: Analysis - Mobile International
Analysis - Mobile International Continued service revenue growth with strong profitability Wireless service €m +4.7% • Service revenues up 4.7% y-on-y revenues • Good trend in Germany 975 956 987 943 927 902 • Continued outperformance in Belgium • Strong growth y-on-y in RoW Q1 '09 Q2 '09 Q3 '09 Q4
Slide 15: Financial review - Mobile International by segment
Financial review - Mobile International by segment Continued revenue growth with strong margins 40.3% €m • Ongoing market outperformance with 32.5% 33.3% 32.5% 33.2% 34.8%2 service revenue growth of 6.6% y-on-y Belgium¹ 30.9% • Divestment of fixed B2B; Q2 revenue impact of € 12m, EBITDA € 2m 204 200
Slide 16: Operating review - Belgium
Operating review - Belgium1 Service revenues up 6.6%, driven by BASE, partnerships and regional focus Net adds • Service revenues up 6.6% y-on-y 3.5 3.5 3.6 3.6 3.6 3.6 – Strong growth in postpaid revenues, mainly driven by BASE brand and SME/SoHo segment 39 38 53 – Service revenue share >18 % 14 29
Slide 17: Operating review - Germany
Operating review - Germany Return to service revenue growth, higher growth in next quarters Net adds • Increased marketing efforts paying off 18.0 18.2 18.7 19.0 19.3 19.6 – Regional organization established, city analysis completed and now showing first positive results within key cities – Net adds
Slide 18: Operating review - Germany (cont'd)
Operating review - Germany (cont’d) BASE relaunch and regionalization examples BASE relaunch Regionalization • Regional profiling based on 4 key elements – Network coverage Grow postpaid Keep subsidies – Point of sale coverage adds low – Point of sale productivity – Postpaid subscriber share Strengt
Slide 19: Operating review - RoW
Operating review - RoW MVNOs in Spain and France on track, leveraging Ortel • Continued subscriber growth with healthy ARPU, mainly Simyo Spain – Total customer base at ~400k • Significantly improved network conditions in Q2 ’10 • Focus on key commercial leads and execution thereof • Growth mainly d
Slide 20: Mobile International - Challenger strategy
Mobile International - Challenger strategy Key pillars for continued profitable growth Multi-brand Partnerships Lifecycle ’03 • Launch Challenger strategy Belgium “incubator” ’05 • Challenger strategy Germany implemented ’08 • Strategy exported to Spain & later to France • Targeting specific custome
Slide 21: German spectrum auction
German spectrum auction Good auction outcome, capacity and standardization are key Total E-Plus O O T T V V 800MHz Paired 2x5 2x5 2x5 2x5 2x5 2x5 60.0MHz 0% Standardized E O T V T V 900MHz Paired 2x5 2x5 2x5 2x5 2x7.4 2x7.4 69.6MHz 14% T T T T E O O O V E E E E 1.8GHz Paired 2x5 2x5 2x5 2x5 2x5 2x5
Slide 22: German spectrum auction (cont'd)
German spectrum auction (cont’d) E-Plus acquired unique combination of spectrum, suiting challenger strategy Spectrum provides flexibility at low cost Prices paid in auction • Doubling amount of spectrum, with most Band Acquired Price paid Price per spectrum MHz/ pop spectrum acquired in standardize
Slide 23: Key pillars of business model
Key pillars of business model Mobile International well positioned to benefit from data opportunity Exploit existing Leverage new capabilities Implications capabilities • Focus on consumer segment • ZTE and incumbent • Remaining most profitable vendors used for roll-out Cost to • No push: low acquis
Slide 24: Gradual enhanced focus on data
Gradual enhanced focus on data Continuation of proven Challenger strategy based on same principles Since 2005: focus on voice Additional growth area: mobile data Market • 2010: data starting to become mass • 2005: >95% voice & SMS, data uncertain perspective market service Fixed-Mobile • Mobile shar
Slide 25: Network & commercial roll-out
Network & commercial roll-out Groundwork is done, focus on execution of accelerated data network roll-out Objective Realized Next steps Up to 21.6 Mbit/s 2010 2012 Up to 3.6 Mbit/s HSPA 1.8 Mbit/s HSDPA 12k sites Network 240 kbit/s EDGE ’09 ’10 2k • Provide highest speed data • Nationwide data cover
Slide 26: M2M opportunity
M2M opportunity Independent platform levered with partnerships Strategic partnership KPN group wide strategy • Strategic partnership with independent platform of Jasper Wireless • Become leading M2M service provider in the – Lead exchange with other telecom operators that pan-European and local mark
Slide 27: Operating review - iBasis
Operating review - iBasis Focus on revenues and profitability, increased traction of turnaround Performance Progress Financial • Focus on balancing revenue growth with 4.3% 4.1% 3.8% profitability, whilst improving market share 3.5% 3.4% – New sales commission plan aligning revenue with margin focus
Slide 28: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 28
Slide 29: Dutch Telco - strategy
Dutch Telco - strategy Key elements of value maximizing strategy Manage for value Grow mobile data Targeting single access Lifecycle ’94 • First GSM network in NL n io • Roll-out (A)DSL ut Br rib an Value st ds ’02 • Roll-out 3G Network Di maximization ’04 • TV offering launch with Customer Lifecycl
Slide 30: Analysis - Dutch Telco business
Analysis - Dutch Telco business Stable EBITDA due to focus on costs and customer value €m Revenues and other income • Revenues and other income down -4.3% 4.3% y-on-y in Q2 ’10 – Continued pressure on traditional business – Ongoing impact economic 1,824 1,838 situation in Business 1,770 1,782 1,758
Slide 31: Financial review - Dutch Telco business by segment
Financial review - Dutch Telco business by segment Solid profitability across all segments €m 26.9% 26.0% 26.9% 29.2% 23.7% 24.0% Consumer • Revenues impacted by continued decrease in voice wireline and 1,031 1,042 1,018 1,004 969 990 regulation • Profitability continues to increase Q1 '09 Q2 '09 Q3
Slide 32: Operating review - Consumer wireless
Operating review - Consumer wireless1 Service revenues down 6.1%, impacted by regulation €m -6.1% • 4.6% impact from regulation Service • Focus on profitable revenues leading revenues 465 477 460 453 434 448 to lower traffic • Partly offset by continued data growth Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10
Slide 33: Operating review - Consumer wireline
Operating review - Consumer wireline Net line loss at manageable level in Q2 X 1,000 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 PSTN/ISDN • PSTN/ISDN line loss stable loss • Outflow to cable stable compared to -92 -77 -83 -87 -87 -72 previous quarters • Continued success of retention offers X 1,000 m
Slide 34: Operating review - Business wireless
Operating review - Business wireless Satisfactory performance of wireless services €m Flat • Service revenues flat y-on-y 247 246 234 247 248 246 – 3.3% impact from regulation Service • Continued data growth revenues • Increased competition on dongles and Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 sm
Slide 35: Operating review - Business wireline
Operating review - Business wireline Continued negative revenue trend €m -7.8% • Continued impact from economy and competition • Underlying revenue trend shows Revenues1 374 371 376 359 361 342 slightly increased decline • € 19m release of deferred connection Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '1
Slide 36: Managing for value
Managing for value Strategic objective to maximize market value and customer value Managing for value Dutch Telco profitability rising • Dutch Telco strategy has two pillars: market value • Value maximization strategy leading to growing and customer value profitability Dutch Telco • Balancing market
Slide 37: Managing for value (cont'd)
Managing for value (cont’d) Actions to increase market value while carefully watching market shares Selective price increases SAC/SRC trending down Strengthen distribution • Selective price increases across all • Efficient use SAC/SRC, based on • Strengthening distribution footprint products and bra
Slide 38: Continuous cost reductions
Continuous cost reductions Cost reductions continue in 2010 and beyond, whilst investing in new services Continuous cost scrutiny Investments in new services New cost efficiency areas Pr Various new areas oc Traffic SAC/ ur • Network rationalization cost em SRC en • Billing systems t • Service deliv
Slide 39: Consumer wireline - key beliefs
Consumer wireline - key beliefs FttH is superior technology, mix of infrastructures going forward FttH superior TV proposition Copper still competitive • FttH considered to be long-term • TV proposition key in competitive • Bandwidths on copper superior solution for the Dutch triple-play package inf
Slide 40: Consumer wireline - strategy
Consumer wireline - strategy Balanced mix to maintain medium-term position, while securing long-term position Copper Differentiating assets • Copper VDSL-CO upgrade • Digitenne: low entry digital TV (April 2010) proposition Strategy driver – Higher BB speeds, up to 30Mb • Distribution power Consumer
Slide 41: Copper - status
Copper - status VDSL enabling nationwide IPTV, matching customer needs VDSL upgrade matching customer needs IPTV accelerating, support broadband base 14% • VDSL-CO upgrade (April 2010) 11% 12% 12% 13% 10% – Sufficiently high broadband speeds, up to 30Mb 193 106 147 – IPTV coverage of 80% 50 62 76 –
Slide 42: Fiber-to-the-Home - status
Fiber-to-the-Home - status Reggefiber performance promising, KPN FttH activations take time Reggefiber JV - status KPN - FttH status Reggefiber controls ~93%¹ Dutch fiber market 288 193 210 Reggefiber JV 163 119 569k HP 72 2 4 7 11 21 26 Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Homes Passed (k) Hom
Slide 43: Fiber-to-the-Home - going forward
Fiber-to-the-Home - going forward Adjusted approach implemented, long-term ambition intact FttH KPN - adjusted approach Turning ‘lessons learned’ into adjusted approach to improve penetration: • Introduced new pricing & proposition strategy • Improved selection criteria regional roll-out areas • Ful
Slide 44: New pricing & proposition strategy
New pricing & proposition strategy Lower product entry levels, stable ARPU Previous offering New: As from 1 July ’10 • Voice bundles optional instead of inclusive • Lower list prices • No ARPU decrease expected Copper Copper Broadband Television VoIP Copper/VDSL Copper Broadband Television VoIP Basi
Slide 45: Mobile data
Mobile data1 Mobile data is a growth opportunity in the years to come m 3.5 Mobile data users Trends • Strong increase in data users – Smartphone data users grow with CAGR of >50% – Laptop data users grow with CAGR of >30% 2008 2009 2010 2011 2012 2013 • Average data usage increasing Smartphone Lapt
Slide 46: Mobile data (cont'd)
Mobile data (cont’d) Align data pricing with cost to serve Network planning ARPU • Declining voice ARPU offset by growing data Spectrum ARPU • Aligning data pricing with cost to serve, e.g. Network quality – Volume Backhaul – Bandwidth – Timing – Quality of Service Sites – Latency • Network quality
Slide 47: Dutch Telco - strategy
Dutch Telco - strategy Key elements of value maximizing strategy Manage for value Grow mobile data Targeting single access Lifecycle ’94 • First GSM network in NL n io • Roll-out (A)DSL ut Br rib an Value st ds ’02 • Roll-out 3G Network Di maximization ’04 • TV offering launch with Customer Lifecycl
Slide 48: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 48
Slide 49: Operating review - Getronics
Operating review - Getronics Impact of economic circumstances remains, on track for EBITDA uplift in 2010 €m Revenues and other income down 10% • Difficult market conditions result in top-line (Existing operations) pressure, no change in customer behavior -12% – The Netherlands down 12% y-on-y in Q2
Slide 50: Agenda
Agenda Chairman’s review Ad Scheepbouwer Group financial review Carla Smits-Nusteling International Eelco Blok Dutch Telco Baptiest Coopmans Getronics Ad Scheepbouwer Concluding remarks Ad Scheepbouwer 50
Slide 51: Concluding remarks
Concluding remarks • Continued focus on cost, customer value and market shares • Multi-brand and partner approach, cost cutting track record • Growth potential from new services, e.g. IPTV, fiber, mobile data • Good result German spectrum auction • Prudent financial framework • Sustainable free cash
Slide 52: Q&A
Q&A
Slide 53: Annex
Annex For further information please contact KPN Investor Relations Tel: +31 70 44 60986 Fax: +31 70 44 60593 ir@kpn.com www.kpn.com/ir
Slide 54: Analysis of results
Analysis of results Key items worth mentioning in results interpretation €m Q2 ’10 Q2 ’09 YTD ’10 YTD ’09 Revenue effect MTA tariff reduction Group -23 -56 -78 -81 EBITDA effect MTA tariff reduction Group 1 -33 -19 -43 Book gain on sale of real estate Other 4 2 6 10 Restructuring charges Group 8 -29
Slide 55: MTA regulation
MTA regulation € ct / min Until 7 July ’10 7 July ’10 Sep ’10 Jan ’11 Sep ’11 Sep ’12 KPN 7.00 5.60 5.60 4.20 2.70 1.20 The Netherlands Vodafone 7.00 5.60 5.60 4.20 2.70 1.20 T-Mobile 8.10 7.10 5.60 4.20 2.70 1.20 • MTA tariffs valid from 1 April 2009 until 30 November 2010 Germany – T-Mobile / Voda
Slide 56: Impact MTA reduction
Impact MTA reduction €m Q2 ’10 YTD ’10 1 1 Revenues EBITDA Revenues EBITDA Germany - - -21 -10 Belgium - - - .- Rest of World - - - - Mobile International - - --21 --10 Consumer -13 1 -31 -7 Of which: Mobile Wholesale -1 - -2 -1 Business -8 1 -19 -1 Wholesale & Operations 2 -2 -1 -11 -1 Intercompany
Slide 57: Restructuring charges
Restructuring charges €m Q2 ’10 Q2 ’09 YTD ’10 YTD ’09 Germany -2 -1 -2 -1 Belgium - - - - Rest of World - - - - Mobile International -2 -1 -2 -1 Consumer -1 -5 -2 -4 Business - - - - Getronics 1 -26 1 -29 Wholesale & Operations 6 -3 3 -5 The Netherlands 6 -34 2 -38 Other 4 6 1 4 KPN Group 8 -29 1 -
Slide 58: Operating expenses
Operating expenses €m Q2 ’10 Q2 ’09 % Salaries and social security contributions 493 541 -8.9% Cost of materials 199 223 -11% Work contracted out and other expenses 1,144 1,182 -3.2% Own work capitalized -25 -28 -11% Other operating expenses 157 171 -8.2% Depreciation1 351 391 -10% Amortization1 196
Slide 59: Analysis operating expenses - Salaries & Cost of materials
Analysis operating expenses Salaries & Cost of materials €m Salaries Y-on-Y decrease • Reduction of own personnel at all segments 16.1% 15.9% 15.2% 15.7% 15.5% 14.7% Q-on-Q decrease • Reduction of own personnel Dutch Telco business and 546 541 502 526 506 493 Getronics Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1
Slide 60: Analysis operating expenses - Work contracted out & Other
Analysis operating expenses Work contracted out & Other €m Work contracted out Y-on-Y decrease • Lower traffic costs due to regulatory tariff cuts 36.3% • Disposal of SNT leading to lower external personnel 34.7% 34.4% 33.9% 34.1% 34.2% • Focus on own sales channels in Germany leading to lower payme
Slide 61: Analysis operating expenses - Depreciation & Amortization
Analysis operating expenses Depreciation & Amortization €m Depreciation1 Y-on-Y decrease • Lifetime of mobile masts increased, lowering depreciation 11.6% 11.5% 11.6% 11.4% charges 10.6% 10.5% • Smaller asset base across all segments, lowering depreciation charges 392 391 384 383 348 351 Q1 '09 Q2 '
Slide 62: Personnel
Personnel • Decrease of 4,381 FTE y-o-y – Reduction of 1,690 FTE in the Netherlands (excl. Getronics) from all segments and 35,638 35,502 due to divestment of SNT Netherlands (Q4 34,550 33,148 ’09) 4,972 4,901 32,203 – Reduction of 1,737 FTE at Getronics, 4,570 31,121 4,470 mainly from divestments a
Slide 63: Tax
Tax P&L Cash flow Fiscal units (€ m) Q2 ’10 Q2 ’09 Q2 ’10 Q2 ’09 Dutch activities -111 -98 -2 60 Getronics -2 5 1 - German Mobile activities -33 -53 -1 -1 Belgian Mobile activities -16 -10 - - Other -7 -2 -2 -1 Total -169 -158 -4 58 • Tax receipt of € 60m in Q2 ’09 related to prior years • Effective
Slide 64: Net cash flow from operating activities
Net cash flow from operating activities €m Q2 ’10 Q2 ’09 YTD ’10 YTD ’09 Operating Profit 839 742 1,632 1,374 Depreciation, amortization and impairments 547 580 1,077 1,182 Interest paid -107 -124 -366 -282 Income tax paid -4 58 -558 -554 Other income (including dividends received) -2 -1 -7 -6 Share
Slide 65: Total cash flow
Total cash flow €m Q2 ’10 Q2 ’09 YTD ’10 YTD ’09 Net cash flow from operating activities 1,072 1,120 1,301 1,179 1 Capex -380 -386 -715 -842 Acquisitions -18 -20 -66 -100 Disposals real estate 15 5 22 19 Disposals other -3 1 75 48 Other2 -250 -5 -317 -3 Net cash flow from investing activities -636 -
Slide 66: Capex
Capex1 €m Q2 ’10 Q2 ’09 % YTD ’10 YTD ’09 % Germany 89 83 7.2% 163 225 -28% % Revenues Germany 11% 10% 10% 14% Belgium 12 22 -45% 25 40 -38% % Revenues Belgium 6.0% 11% 6.2% 10% Rest of World 1 1 0% 2 2 0% % Revenues Rest of World 2.9% 4.5% 3.2% 5.3% Mobile International 102 106 -3.8% 190 267 -29% %
Slide 67: Balance sheet
Balance sheet Assets Equity & liabilities € bn € bn 24.3 24.7 24.9 24.9 24.3 24.7 24.9 24.9 24.3 24.3 3.2 2.9 3.8 4.2 3.5 5.7 5.7 5.8 5.8 5.8 1.3 1.3 1.1 1.1 1.1 Goodwill Group equity 3 3.0 2.9 2.9 2.8 3.0 Licenses Provisions 7.6 7.5 7.5 1 13.8 15.5 14.7 14.4 14.5 7.7 7.4 Non-current PPE liabilities
Slide 68: Share repurchase progress
Share repurchase progress Date1 Value (€ m) Shares (m) Avg. share price (€) Q1 ’10 103.1 8.9 11.60 April 172.5 15.3 11.31 May 224.4 21.4 10.49 June 57.2 5.4 10.49 Q2 ’10 454.1 42.1 10.79 July2 23.9 2.3 10.34 Total 581.1 53.3 10.90 • € 1bn share repurchase program for 2010 started on 4 February 2010
Slide 69: Debt summary
Debt summary € bn Q2 ’10 Q1 ’10 Q2 ’09 Bonds 13.75 13.30 12.73 Eurobonds 11.75 11.61 10.68 Global bonds 2.00 1.69 2.05 Other debt 0.21 0.22 0.69 Other loans at Royal KPN 0.17 0.16 0.14 Consolidated debt 0.04 0.06 0.55 Fair value financial instruments -0.21 0.25 0.32 Total debt 13.75 13.77 13.74 – of
Slide 70: Debt portfolio
Debt portfolio Breakdown of € 13.8bn gross debt1 12% 75% Financial Global bonds Other instrum ents 13% 14% 2% 2% EUR USD2 GBP2 7% Eurobonds 93% 82% Fixed Floating (incl. swapped) 1 Book value of interest bearing financial liabilities plus the fair value of financial instruments related to these fina
Slide 71: Consumer voice market
Consumer voice market1 m Q2 ’10 Q1 ’10 Q2 ’09 KPN PSTN / ISDN 1.85 1.92 2.19 Wholesale Line Rental (WLR) 0.40 0.41 0.42 Total traditional voice 2.25 2.33 2.61 KPN VoIP 1.27 1.26 1.18 Cable VoIP 1.66 1.60 1.39 Alternative DSL VoIP 0.42 0.41 0.37 Total VoIP 3.35 3.27 2.94 Mobile-only 1.25 1.25 1.25 To
Slide 72: Infrastructure
Infrastructure Deploying mix of technologies going forward ADSL on copper VDSL from FttC FttH Wireless central office (VDSL-CO) Central office Central office (ADSL2+) (VDSL2) ODF1 Street Street Street cabinet cabinet cabinet up to 20 Mb/s down up to 40 Mb/s down 30-50 Mb/s down >100 Mb/s >14 Mb/s do
Slide 73: Unbundling tariffs
Unbundling tariffs Unbundling in current network Category Monthly tariff Line sharing (LLU)1 € 0.10 / line MDF Node SDF Fully unbundled (LLU)1 € 6.53 / line colocation KPN / Telco MDF colocation1 € 839.60 / footprint / year ~28,000 1,350 street cabinets local exchanges MDF backhaul Commercial pricin
Slide 74: Spectrum Germany
Spectrum Germany in MHz Current allocation Band T-Mobile Vodafone E-Plus O2 Total 800 MHz 2 x 10 2 x 10 - 2 x 10 60 900 MHz 2 x 12.4 2 x 12.4 2x5 2x5 69.6 1800 MHz 2 x 20 2 x 5.4 2 x 27.4 2 x 17.4 140.4 2 x 10 2 x 15 2 x 20 2 x 15 2.1 GHz 154.2 1x5 1x5 1x5 1 x 19.2 2 x 20 2 x 20 2 x 10 2 x 20 2.6 GH
Slide 75: Spectrum in Belgium
Spectrum in Belgium Currently fairly allocated, potential new entrant KPNgB Proximus Mobistar 900MHz 2x10.8 2x12 2x12 KPNgB Proximus Mobistar Prox Mob Free 1.8GHz 2x5.8 2x5.8 2x22 2x15 2x15 2x11.4 Current KPNgB Proximus Mobistar Free 2.1GHz status 2x15 1x5 2x15 1x5 2x15 1x5 2x14.8 1x5 Free 2.6GHz 14
Slide 76: Service revenue growth Mobile International
Service revenue growth Mobile International Service revenue growth Germany1 Service revenue growth Belgium1 9.7%9.7% 2.6% 2.3% 2.2% 7.7%7.7% 7.5%7.5% 1.4% 2.0% 2.0% 6.6% 6.6% 6.2% 0.0% 3.1% -0.4% -0.7% -1.3% Q2 ’09 Q3 ’09 Q4 ’09 Q1 ’10 Q2 ’10 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Reported Underlying (e
Slide 77: Dutch wireless services disclosure
Dutch wireless services disclosure Q2 ’10 Q1 ’10 Q2 ’09 Service revenues (€ m) 761 740 783 − Consumer 448 434 477 − Business 246 248 246 − Other Dutch activities1 67 58 60 SAC / SRC (€) − Consumer 157 183 116 − Business2 215 255 323 1 Indicates amongst others Mobile Wholesale NL, Simyo and visitor r
Slide 78: KPIs Consumer - Wireline Voice & TV
KPIs Consumer Wireline Voice & TV Voice Q2 ’10 Q1 ’10 Q2 ’09 Market share – Voice1 >50% >50% ~55% – Traditional voice2 >80% >80% >75% – VoIP3 37% 37% 39% Market penetration VoIP3 56% 55% 51% Access lines (x 1,000) 3,102 3,164 3,351 – VoIP3 (packages broadband and voice) 1,256 1,246 1,162 Net line lo
Slide 79: KPIs Consumer - Broadband & Fiber
KPIs Consumer Broadband & Fiber Broadband Q2 ’10 Q1 ’10 Q2 ’09 Market penetration Broadband1 83% 83% 81% Market share Broadband ISP2 42% 42% 43% Broadband ISP customers2 (x 1,000) 2,568 2,584 2,568 Broadband ARPU (€) 32 31 30 Fiber Q2 ’10 Q1 ’10 Q2 ’09 Subscribers 42 31 5 – FttC (x 1,000) 16 10 1 –
Slide 80: KPIs Consumer - Wireless & Mobile Wholesale NL
KPIs Consumer Wireless & Mobile Wholesale NL Wireless Q2 ’10 Q1 ’10 Q2 ’09 – Customers1 (x 1,000) 5,992 6,079 6,795 – Service revenues (€ m) 448 434 477 – ARPU (€) 25 23 23 – MoU2 (originating, terminating) 116 109 110 – SAC/SRC (€) 157 183 116 Mobile Wholesale NL Q2 ’10 Q1 ’10 Q2 ’09 Customers (x 1
Slide 81: KPIs Business - Infrastructure services
KPIs Business Infrastructure services Wireline & Data Q2 ’10 Q1 ’10 Q2 ’09 Market share voice1 >45% >45% ~50% 1,446 1,446 Access lines (x 1,000) 1,414 1,446 1,533 – PSTN 671 682 719 – ISDN 716 735 786 – VoIP 20 21 20 Business DSL 150.0 145.4 130.3 Traditional voice ARPU (€) 51 57 51 − Access2 27 32
Slide 82: KPIs Business - Wireless services
KPIs Business Wireless services Wireless Q2 ’10 Q1 ’10 Q2 ’09 – Customers (x 1,000) 1,715 1,712 1,616 – of which data users 50% 47% 44% – Service revenues (€ m) 246 248 246 – ARPU (€) 48 49 51 – MoU (originating, terminating) 200 211 211 – SAC/SRC (€) 215 255 323 82
Slide 83: KPIs Getronics & iBasis
KPIs Getronics & iBasis Getronics Q2 ’10 Q1 ’10 Q2 ’09 Service revenues (€ m) 418 419 492 Workspaces (in m) – Serviced IT workspaces 1.7 1.7 1.7 – Serviced Voice workspaces 0.6 0.6 0.6 Getronics - ICT Services Q2 ’10 Q1 ’10 Q2 ’09 Housing & Hosting (x 1,000) − Housing services (# m2) 25.0 25.0 24.9
Slide 84: KPIs Wholesale & Operations
KPIs Wholesale & Operations Wholesale & Operations Q2 ’10 Q1 ’10 Q2 ’09 Retail voice (without ADSL) 3,233 3,335 3,694 Local loop (x 1,000) MDF access lines1 3,699 3,725 3,760 – of which line sharing2 1,246 1,304 1,494 Unbundling3 (m) 1.1 1.1 1.1 – Shared unbundled lines 0.2 0.2 0.2 – Fully unbundled
Slide 85: KPIs Germany
KPIs Germany Q2 ’10 Q1 ’10 Q2 ’09 Market share1 – Service revenue 15.6% 15.4% 15.5% – Customer base 17.8% 17.6% 16.9% Customers (x 1,000) 19,590 19,290 18,235 – Postpaid 6,815 6,764 6,785 – Prepaid 12,775 12,526 11,450 Service revenues (€ m) 772 729 757 ARPU (€) 13 13 14 – Postpaid 26 25 27 – Prepai
Slide 86: KPIs Belgium (Mobile)
KPIs Belgium (Mobile)¹ Q2 ’10 Q1 ’10 Q2 ’09 Market share2 – Service revenue >18% ~18% >17% – Customer base ~26% ~26% >25% Customers (x 1,000) 3,629 3,566 3,487 – Postpaid 712 702 612 – Prepaid3 2,917 2,864 2,875 Service revenues (€ m) 178 169 167 ARPU (€) 17 16 16 – Postpaid 48 46 50 – Prepaid 9 8 9