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EDITIONS
Tuesday, 20 August, 2002, 07:22 GMT 08:22 UK
KPN hit by 3G losses
KPNQwest offices
KPN's joint venture KPNQwest filed for bankruptcy
Dutch telecoms giant KPN has posted a $9.2bn (9.4bn euros) net loss for the second quarter but sought to reassure investors by promising that earnings were improving.

The company wrote down the value of some of its foreign mobile assets, reflecting the poor performance of its third generation mobile phone operations in Germany and Belgium.

KPN is one of several European telecoms operators which borrowed heavily to buy third generation mobile phone licences, but who have yet to see returns on their investments.

The company has been particularly hard hit by the poor performance of its German subsidiary E-Plus, which alone counted for a 6.6bn euro hit on earnings in the second quarter.

Future brighter?

KPN has, however, forecast that it expects its earnings to grow by at least 14% this year.

"Once more, we have been able to revise positively the outlook for the year as a whole," KPN chief executive Ad Scheepbouwer said in a statement.

"The write down mainly concerns UMTS licences and goodwill related to the mobile operators E-Plus in Germany and BASE in Belgium," the operator said in a statement.

KPN also had to take a charge for the bankruptcy of its joint venture KPNQwest.

KPN has itself skirted with collapse in the past and has engaged in long process of restructuring, which analysts now hope will start to benefit the company's bottom line.

It has cut more than 6,000 jobs and has sold some assets to help reduce its debt, expected to be 13.9bn euros by the end of the year.

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 ON THIS STORY
David Clevely, from consultancy firm Analysis
"The prices paid for 3G look extraordinarily high"
See also:

19 Aug 02 | Technology
24 Jun 02 | Business
18 Mar 02 | Business
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