Our 2019 – 2021 strategy
We live in an era of digital transformation. Driving demand for flexibility, autonomy and personalized experiences. That is why we increase our efforts to improve and digitalize the user experience of our products and services. We want to offer the best solutions for everyone; family or business, at home or on the move. Our solutions will give access to the best possibilities in the digital world. We will deliver premium converged services, which are simple, digital and flexible.
KPN’s strategic priorities for 2019 – 2021 are focused on driving organic sustainable growth:
- Building the best converged smart infrastructure;
- Focusing on profitable growth segments; and
- Accelerating simplification and digitalization.
This strategy aims to deliver the Company’s medium-term ambitions, which are:
- Growing Adjusted EBITDA after leases organically: driven by a new multi-year sustainable net opex after leases reduction program of around EUR 350m and supported by growth in profitable segments and revenue stabilization;
- Setting annual Capex at EUR 1.1bn: a substantial shift in the mix enabling higher access investments; and
- Sustainable Free Cash Flow growth driven by EBITDA after leases: contributing to a progressive regular dividend per share and deleveraging.
Building the best converged smart infrastructure
KPN will continue building and investing in future-proof infrastructure, offering high-quality products and services with a best-in-class customer experience. Specifically, in the coming years KPN will selectively expand its FttH footprint by 1 million new households by the end of 2021, and will modernize its mobile network through a 5G-ready equipment upgrade.
Focusing on profitable growth segments
On the commercial side, KPN will leverage its strong market positions to further drive its convergence strategy with a clear focus on value over volume. KPN continues to focus on securing and growing profitable service revenues.
In Consumer, broadband households and the ‘value per converged household’ are expected to grow driven by investments in access delivering best-in-class digital customer experience. KPN aims to grow converged households by 300k and the converged postpaid base to 70% by the end of 2021.
In Business, KPN will focus on further digitalization of its operating model while executing on profitability and value. KPN aims to offer a simplified and standardized product portfolio, grow in converged connectivity services and selectively grow in IT. This will drive stabilization of end-to-end Adjusted EBITDA by mid 2020.
Accelerating simplification and digitalization
The competitive market dynamics require a flexible organization capable of bringing innovative products and services to the market quickly. As a result, KPN will accelerate simplification and the transformation to a digital operating model, making the company lean, faster, and more agile.
KPN’s strategic actions that will result in a state-of-the-art lean operating model, which will deliver sustainable improvements in KPN’s indirect opex base. These savings will primarily be realized through further simplification, automation and end-to-end digitalization of IT platforms and systems. This will result in around EUR 350m net indirect opex savings over the period 2019 - 2021. The accelerated digitalization and automation, which are inherent in the telecom industry, will also lead to organizational simplification.
 Indirect opex after leases adjusted for the impact of restructuring costs and incidentals End-to-end Adjusted EBITDA refers to the new segment reporting after the change in the organizational structure per 1 January 2019