Lack of interest scuppers KPN's Base sale

Dutch incumbent KPN has called off the sale of its Belgian subsidiary Base after failing to receive a high enough offer. The firm said Wednesday morning that the sale was discontinued because “current difficult market conditions are reflected in unsatisfactory non-binding offers for Base.” KPN announced plans to sell the operation in June. It is also looking to divest German operation E-Plus.

In July KPN reported that its net profit for the first half of 2012 had fallen by 40 per cent year on year to €603m despite revenues dropping by only 2.2 per cent for the six month period. At the time, CEO Eelco Blok described Base as “a successful challenger with excellent momentum for continued upside,” adding that “we expect a sale price to reflect that.” Blok’s assessment of Base was reiterated in KPN’s announcement on Wednesday.

Figures from Informa’s WCIS show that Base led the Belgian market in subscriber growth in the year to end June 2012, increasing it’s customer base by 8.62 per cent to 3.39 million subscriptions. Despite this it remains in third and last place by some distance behind market leader Belgacom, which increased its customer base by 3.42 per cent to 5.26 million and second placed Mobistar which grew by 3.37 per cent over the same period to 4.14 million customers.

Figures for ARPU tell a less promising story for Base, however. KPN’s subsidiary had blended ARPU of $17.99 in June this year, compared to $32.12 for Belgacom and $37.06 for Mobistar.

In June this year Latin American powerhouse America Móvil took its stake in KPN to 23 per cent and the group’s leader Carlos Slim has voiced a desire to increase that yet further.