KPN: Pioneer Operator
Some operators stand out as being especially far down the road to Telco 2.0. We mentioned Telenor's machine-to-machine activities (to say nothing of Mobilt Bedriffsnett, Content Provider Access, and Telenor Fusion) recently; now, another Telco 2.0 pioneer operator has moved into this field. KPN has just announced a partnership with the specialist M2M operator Jasper Wireless, under which Jasper will resell KPN service to its enterprise customers and KPN in turn will take an equity stake in Jasper.
This is an example of a number of important points about Telco 2.0.
- The horizontal M2M opportunity: see also here and here and here.
- The vital importance of the right channels - getting access to new markets requires the right partners
- Telco cashflow is not just for paying special dividends - as Jonathan Dann of Barclays Capital said at our last event, operators aren't getting any credit from the market for their cash, so they may as well use it. One of the special features of O2 Litmus is that it has a resident venture-capital team from Telefonica Ventures.
KPN hasn't been idle in other fields, either; its decision to invest in Reggefiber and Citynet Amsterdam, and to stop stalling and provide service over the Netherlands' munifibre deployments, showed it to be willing to work with partners who most operators still see as the enemy in order to modernise its infrastructure.
And it took an early and innovative tack dealing with its underperforming German 3G network E-Plus - rather than keep pumping in the handset subsidies, advertising, etc, they converted it into a wholesale-optimised operator providing service to multiple MVNOs. As Jonathan Dann also pointed out, nobody in the markets cared at the time they announced the change, but they certainly paid attention when real profits started rolling in. The following chart shows KPN's stock price over the last 5 years - re-rating upwards in the boom and then holding its gains through the crisis. (The Reuters page also shows that their last three quarterly earnings have beaten the estimates soundly.)
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