Dutch telecom operator winds down Asian region operations

Dutch telecom operator winds down Asian region operations

SINGAPORE (AFP): Dutch telecommunications operator Royal KPN is winding down its Asian presence, putting its investments in Hong Kong, Indonesia and India up for sale, a report said Monday.

Withdrawing from Asia will allow the operator to divert resources to defend its European turf where prices are falling sharply as a result of intense competition, said Hans van Moorsel, the group's chief executive for Asia.

"We will use our resources to strengthen our position in our home market and Europe. The prime target is Europe," he told the Business Times.

Van Moorsel said KPN, as with other telecom operators, faced pressure in Europe where the price for telecom services is falling as new competitors enter the market.

KPN also needs funds to pay for building a third-generation (3G) mobile phone network and plans to raise 5.5 billion euros (US$4.73 billion) through issuing shares and convertible loan stock.

Since April, the company has spent $7.7 billion on 3G licenses in Britain, Germany and the Netherlands, and at the same time its share price has dived from a high of 73.46 euros to around 20 euros.

The Dutch operator has invested between $500-600 million in the Asian region, and plans to sell stakes in its Asian operations, if the price is right.

"If we can get a good price, we will use the money to improve our core business in Europe," said Van Moorsel, who was unavailable for further comment Monday.

The operator's biggest investment is a 17.3 percent stake in Indonesian mobile operator PT Telkomsel.

KPN also holds stakes in Hong Kong mobile operator People's Telephone Company and an Indian Internet venture with Wipro Ltd.

It was in the process of applying for a facilities-based telecoms license in Singapore when the decision was made to pull out of Asia, the report said.