Company Reports

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. KPN has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each).

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. KPN has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each).

The service revenue risk we flagged last quarter materialized in KPN’s second quarter, with management reducing 2026 service revenue growth guidance to 1.5% from 2.0%-2.5% previously.

KPN delivered a first quarter broadly in line with 2026 guidance. Service revenue growth was the only weak spot, with 0.6% year-on-year growth while management has forecast 2%-2.5% growth in 2026.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. KPN has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each).

KPN reported full-year service revenue of EUR 5.4 billion, up 2.7% year over year, meeting guidance as its fiber-to-the-home rollout continued to support net consumer broadband additions. Management reaffirmed its 2027 targets while guiding for moderated service revenue growth in 2026.

The Morningstar Developed Markets Europe Communication Services Index has returned 23.7% year to date, thanks to renewed hopes for consolidation and modestly improving conditions in markets like Italy.

KPN maintained its commercial momentum in the third quarter, adding 6,000 net consumer broadband subscribers and 47,000 postpaid mobile subscribers sequentially. Service revenue rose 1.7% year on year, reflecting strength in both consumer and business segments.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. KPN has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each). The Dutch broadband market is a rational oligopoly where both players prefer not to engage in aggressive market share shifts, but rather maintain stable positions, executing slight price increases each year. The mobile market, where KPN has a 20% share, has three major operators (KPN, VodafoneZiggo, and Odido, previously T-Mobile Netherlands), which allows for overall market stability.

KPN delivered a solid second quarter with 3.7% year-on-year revenue growth and 6.4% adjusted EBITDA after leases growth, reaching EUR 1.34 billion and EUR 670 million, respectively.

We are updating our moat ratings for eight European telecom stocks. European telecom companies lack the scale and pricing of international peers. Network redundancies and little cross-border synergies are common, and the regulatory landscape is not supportive of competitive advantages.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. KPN has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each). The Dutch broadband market is a rational oligopoly where both players prefer not to engage in aggressive market share shifts, but rather maintain stable positions, executing slight price increases each year. The mobile market, where KPN has a 20% share, has three major operators (KPN, VodafoneZiggo, and Odido, previously T-Mobile Netherlands), which allows for overall market stability.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. It has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% market share each). The Dutch broadband market is a rational oligopoly where both players prefer not to engage in aggressive market share shifts, but rather maintain stable positions, executing slight price increases each year. The mobile market, where KPN has a 20% share, has three major operators (KPN, VodafoneZiggo, and Odido, previously T-Mobile Netherlands), which allows for overall market stability.

KPN first-quarter 2025 results came in ahead of company-compiled consensus and management’s guidance, with service revenue of EUR 1.32 billion and adjusted EBITDA after leases of EUR 634 million, up 3.8% and 4.7%, respectively.

As expected, narrow-moat KPN delivered on its 2024 guidance, with service revenues up 3.4% year on year to EUR 5.2 billion, compared with guidance of 3.0% growth. For 2025, KPN guided for 3% service revenue growth, EUR 2.58 billion in EBITDAaL and EUR 1.25 billion in capital expenditure. The firm's commitment on dividends also remains on track, with EUR 0.17 expected for fiscal-year 2024 and EUR 0.182 for 2025, a 7% increase. KPN remains one of our favorite picks for investors interested in European telecoms, together with Deutsche Telekom and Tele2. However, all of these names remain fairly valued at the moment. We are maintaining our EUR 3.40 fair value estimate for KPN.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. It has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% each). We believe the Dutch broadband market to be a rational oligopoly where both players prefer not to engage in aggressive market share shifts but rather maintain stable positions, executing slight price increases each year. The mobile market, where KPN has a 20% share, has three major operators (KPN, VodafoneZiggo, and Odido, previously T-Mobile Netherlands), which allows for overall market stability.

Narrow-moat KPN reported third-quarter adjusted revenue growth of 4.2% to EUR 1,420 million and adjusted EBITDAaL growth of 2.3% to EUR 643 million, both slightly above company-compiled consensus. Free cash flow was the only metric that came in below consensus, with management citing timing of interest payments, higher cash taxes, and investment in working capital as the cause. Management reaffirmed its guidance for the year as well as its midterm ambitions. We make no changes to our forecasts and maintain our EUR 3.20 fair value estimate.

Narrow-moat KPN's second-quarter results were slightly ahead of company-compiled consensus. Adjusted revenue grew by 4.5% year over year to EUR 1.39 billion, which flowed into the EBITDAaL line which grew by 5.6%, reaching EUR 629 million. Adjusted EBITDA after leases expanded 40 basis points to 45.2%. Management reiterated its yearly outlook, which seems conservative at this point. Management is targeting 3% growth in adjusted revenue and EBITDAaL, while these same metrics are up 3.9% and 4.6% in the first half of the year, respectively. We maintain our EUR 3.20 fair value estimate, with shares remaining slightly overvalued, trading in EUR 3.60 territory.

Narrow-moat KPN has started 2024 on a strong note with revenue and adjusted EBITDA after leases growing 3.3% and 3.6%, respectively and management raised guidance slightly after the acquisition of Youfone. KPN now expects adjusted EBITDAaL of EUR 2.5 billion in 2024 compared with EUR 2.48 billion before. Growth from KPN is two-sided: first, the Dutch telecom market remains highly rational, with the overall market growing by 4.3% in fourth-quarter 2023, according to Telecompaper. This is an exception as many telecom markets across Europe tend to shrink and not grow. Second, KPN is outperforming its peers, especially in the broadband segment, where it is gaining market share from VodafoneZiggo as the company keeps rolling out fiber to the home in the Netherlands. We maintain our EUR 3.20 fair value estimate, with shares being slightly overvalued. KPN, together with Deutsche Telekom and Tele2, remains one of our favorite picks among European telecom companies. KPN aims to grow dividends at a 7% compounded annual growth rate until 2027, in addition to EUR 200 million of yearly buybacks, which we see as maintainable.

KPN is the incumbent telecom operator in the Netherlands, operating in the fixed-line and mobile markets. It has maintained a stable market share during the past decade in broadband, where it shares leadership with peer VodafoneZiggo (40% each). We believe the Dutch broadband market to be a rational oligopoly where both players prefer not to engage in aggressive market share shifts but rather maintain stable positions, executing slight price increases each year. The mobile market, where KPN has a 20% share, has three major operators (KPN, VodafoneZiggo, and Odido, previously T-Mobile Netherlands), which allows for overall market stability.