Belgian mobile phone unit sale

Updated: 2012-04-16 07:55

(China Daily)

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Belgian mobile phone unit sale

Royal KPN NV, the Netherlands' largest phone company, is considering a sale of its Belgian mobile phone unit that could fetch 1.8 billion euros ($2.4 billion), according to people familiar with the situation.

The BASE unit, Belgium's third-largest mobile operator, will probably attract interest from private equity firms such as Apax Partners LLP, the people said, declining to be identified as the plans are private. Deliberations are at an early stage, and no formal auction process has been established, the people said. Initial information may be sent to potential buyers in May, one of the people said.

Europe's biggest telecommunications operators are shedding assets and slashing jobs as they grapple with stagnant revenue and the cost of building out next-generation networks to handle the data demand of devices such as Apple Inc's iPhone.

France Telecom SA, the country's former phone monopoly, in December agreed to sell its Swiss mobile-phone business to Apax for about $2.1 billion after the buyout firm beat rivals including EQT Partners AB and Providence Equity Partners Inc. A spokesman for KPN declined to comment on any potential sale.

KPN, based in the Netherlands, said in January that it would accelerate a restructuring program that will cost between 4,000 and 5,000 jobs after it predicted lower profit and cash flow this year. Its shares have declined 17.6 percent since the beginning of 2012, compared with a fall of 3.4 percent in the Bloomberg Europe Telecommunications Index, as KPN struggles to maintain profits and invest in its domestic network.

The company, which is still increasing its dividend payout in 2012, may face new competition as the Dutch government reserves some space for new market entrants in an upcoming auction of mobile frequencies. The arrival this year of a fourth full-service mobile operator in France, Iliad SA, has eroded sales for larger competitors.

KPN and France Telecom aren't the only European phone companies struggling as consumers depend more on services such as the Skype Internet calling software and WhatsApp, a free instant-messaging client.

Telefonica SA, Spain's largest phone company, in December cut its dividend for the first time in a decade, citing "significantly" changed market conditions.

Bloomberg News in London

(China Daily 04/16/2012 page14)