KPN announced wide-ranging job cuts after reporting falling sales and profits in 2013.
The Netherlands-based operator said 1,500-2,000 jobs would be lost by 2016 as part of a restructuring plan that is expected to lead to €300 million in cost savings.
Full-year 2013 group revenues fell 10 percent year-on-year to €8.5 billion, while net profit was down 6.7 percent to €293 million after the company made a loss of €108 million in Q4.
The results exclude the contribution E-Plus, which KPN is in the process of selling to Telefónica.
KPN chief executive Eelco Blok said he remained “confident” that regulatory approval would be attained for the sale.
He added: “We intend to start paying dividends for the year 2014 again. KPN's financial profile will continue to improve after the sale of E-Plus. In addition, we may benefit from additional cash through the receipt of dividends from the 20.5 percent stake in Telefónica Deutschland.”
For 2013, KPN’s residential business was the only segment that reported growth, with sales up 2.5 percent, while all the other operations lost revenues.
The operator added a net 3,000 customers between October and December meaning it had total 7.35 million at year-end.
Of these, 323,000 customers signed up for KPN’s 4G LTE network; this was up from 98,000 three months earlier.
Blok said that the operator expects its financial performance to stabilise toward the end of 2014.
“We have now laid a strong foundation and expect the financial results stabilise towards the end of the year 2014 and that the free cash flow will grow in 2015,” he commented.
KPN spent much of last year fighting a takeover attempt from America Movil. It is also facing intensifying competition in the Netherlands, with cable operator Ziggo agreeing last week to a full takeover bid by Liberty Global.
Carrie Pawsey, Senior Analyst at Ovum said that the downward trend of revenues puts KPN under greater risk of takeover.
“The biggest problem for KPN is that the telecoms industry as a whole is very reliant on economies of scale and what KPN is having to do is selling off its non-performing assets. We can see the benefits of this but the downside is that the sale would make KPN a smaller entity [that] would not benefit from economies of scale,” explained Pawsey.
A recent market report by Ovum predicts that mobile market revenues in the Netherlands will decline at a CAGR of 1.1 percent over the 2013-18 period.