New KPN CEO is said to seek acquisitions in strategy shift
December 07 2017 10:32 PM
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Maximo Ibarra’s ambitions would be an about-face from the path of current CEO Eelco Blok, who divested German and Belgian units.

Bloomberg/Milan

Royal KPN NV’s incoming chief executive officer intends to pursue foreign acquisitions, reversing the Dutch carrier’s divestment strategy of recent years while boosting domestic fibre investments, according to people familiar with the plans.
Maximo Ibarra, who will take over the former phone monopoly in April and is already advising the current management, is scouting for potential targets that could include Belgium’s Proximus Sadp, TDC A/S in Denmark or Finnish carrier Elisa Oyj in a bid to create a company large enough to thrive in an increasingly competitive European market, said the people, who asked not to be identified discussing private plans.
The considerations are preliminary and could change after consultations with KPN board members, the people said. KPN spokesman Stefan Simons said the carrier’s goal is to invest in fibre broadband and upgrade its copper network in the Netherlands and currently has no plan to make international acquisitions. “Our strategy is clear,” he said in e-mailed comments.
Ibarra’s ambitions would be an about-face from the path of current CEO Eelco Blok, who divested German and Belgian units, leaving the carrier with a shrinking domestic business plagued by fierce competition. A change of tack could be timely as fifth-generation wireless networks light up in the coming years.
Regional giants like Vodafone Group Plc and Orange SA have an advantage over smaller, single-market carriers such as KPN in monetising the so-called Internet-of-things, which already connects millions of machines to the web.
Shares of Proximus rose as much as 3.6% yesterday, while TDC gained as much as 4.4% and Elisa was up as much as 2.6%.
Still, KPN, the largest Dutch operator, may be too small for big acquisitions, according to InsingerGilissen analyst Jos Versteeg, who has followed the company for more than a decade. The carrier has a market value of €12.9bn ($15.2bn). That compares with $6.8bn for Elisa, $11.4bn for Proximus and $4.9bn for TDC.
Blok in 2011 inherited a business that had underinvested in its networks, said Versteeg. He then spent the first part of a seven-year tenure as CEO fighting off an ultimately failed bid from Carlos Slim’s America Movil SAB. Since then, Blok has focused KPN and defended its leading domestic position with substantial investments and bundles of fixed, Internet and wireless services.
Now, KPN faces renewed competition from a recently formed joint venture between Vodafone and Liberty Global Plc’s Ziggo. In addition, Deutsche Telekom AG’s T-Mobile has revamped management and Sweden’s Tele2 AB is attracting users with a flat 25-euro-a-month contract with unlimited data, adding to the challenges Ibarra will inherit.
The incoming CEO will also focus KPN on accelerating the buildout of fibre to homes in the Netherlands, which currently has a penetration of about 40% of households, the people said.
Ibarra, 48, as CEO of Wind Telecomunicazioni SpA, led the creation of the €21.8bn joint venture in Italy now called Wind Tre by combining CK Hutchison Holdings Ltd and Veon Ltd’s domestic units.
On Wednesday, shareholders gathered at KPN’s headquarters in The Hague and approved payments to Ibarra for his services as an adviser of 595,000 euros in cash and shares, some of which is subject to a retention period. As CEO, his annual base salary will be €935,000.




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