The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Usman Ghazi - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: I've got 2 questions, related to fiber. And then one follow-up on the [trade-off between Consumer and wholesale, please,] if that's okay. So on fiber,
I mean, I can see that the regulator allows KPN to earn a return of up to 10% on its investment. So I can understand why you want to accelerate
deployment and that's all fine. But the two questions I had was: Number one, you said yourself that there is a legal -- there is a court challenge on
[cable/as -- the joint dominance regulation]. And there is a fiber pricing review, I understand that will be available in the spring. So would you see
a benefit in accelerating fiber deployment before you have the outcome of those cases? And if so, why?
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JANUARY 29, 2020 / 12:00PM, KPN.AS - Q4 2019 Koninklijke KPN NV Earnings Call
And then the second question is just directed to Jan Kees, please. So I can understand, when you say that the ramp-up in FttH deployment in 2020
has to go to close to, let's say, 400,000 versus the 120,000 that you've done. And then in 2021, there is a little bit more ramp-up to, let's say, 500,000,
but the biggest ramp-up, like you said, is in 2020. Now if you have to pay 60% of the CapEx related to the ramp-up 15 months before the CapEx is
accrued, then that -- I mean, I don't know, when I look at it, that means that the bulk of the CapEx, working capital headwind is actually happening
in '19, not in '20, right? Because you've got the ramp-up, but you're paying 15 months, 60% of that CapEx, 15 months in advance. That actually
comes -- the headwind comes in '19, not in 2020. Just want to understand where I'm missing something here. Those are the fiber questions.
And then just on your strategy on consumer versus gaining in wholesale. I can see that you're effectively gaining 2 wholesale customers, losing
one retail customer. And when I look at the Wholesale rates versus the Telfort ARPU, it seems like that's a net margin accretive outcome. I just
wanted to confirm if that is around the right way of thinking about it?
Question: Usman Ghazi - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: I see. Just to follow up then, just so I understand. So you're saying that the ramp-up in '20, the advance payments for that have not been made in
'19. I mean those will really be made in '20 and then '20 also has to cover the '21 ramp.
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JANUARY 29, 2020 / 12:00PM, KPN.AS - Q4 2019 Koninklijke KPN NV Earnings Call
Question: Roman Arbuzov - JP Morgan Chase & Co, Research Division - Analyst
: Just 2 quick questions, please. So firstly, just coming back to cost. If you -- Joost, you sounded quite positive on the prospects of continued cost-cutting
in 2020, and it sounds like you want to continue or even accelerate the pace that you've delivered on in 2019. So why not upgrade your cost
guidance with this 3-year deal, the EUR 350 million target, please? That's the first one.
And then the second one is just on the heightened competition in the convergence environment in this fixed space in the Netherlands. Do you
think of this -- and then kind of the pressure that you've seen in Q4. I guess it's hard to read competitors' action, but nonetheless, do you think of
this as a temporary kind of marketing-related pressure around product launches? Or do you think this is a more structural shift that we'll see a lot
of more in 2020?
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