KPN outlines Getronics integration plan
31/10/2007
Dutch telecoms operator KPN has revealed how it plans to integrate its $1bn takeover of Getronics in its bid to become a serious force in the IT services sector.

31st October 2007

CBR By Staff Writer

The company has made relatively little progress in advancing its IT services business, some two years after first announcing its intention to make a move in the market. However, following the completion of the Getronics takeover last quarter, it said it is on course to become "a one-stop shop for telecoms and ICT services."

The combined company already claims leadership in the domestic workspace management space, which covers desktop, office telephone, email, and helpdesk support. KPN is also starting to cross-sell and up-sell Getronics' IT services portfolio to its existing telecoms client base in the SME sector, and is marketing itself as an end-to-end service provider to medium-sized and corporate accounts.

KPN said it expects this cross-selling to bring in a further 50m euros ($72m) annually from 2009, and said it has taken the decision to keep Getronics as an independent IT company due to "the fact that the dynamics of this market are different from the telecoms business."

This will make cross-selling more difficult, but by granting Getronics its autonomy, it will ensure that it will avoid the problems that Deutsche Telekom had with its purchase of Debis Systemhaus, a German Getronics peer that lost its identity after being subsumed within the vast T-Systems organization.

KPN said the initial focus on the Getronics integration process will be on achieving short-term cost savings, and it said it would look at disposing further non-core assets following the recent sales of Getronics' operations in Iberia and Hong Kong.

KPN also reported financial results for the third quarter. Profit before interest, tax, depreciation, and amortization rose 1.2% to 1.2bn euros ($1.7bn) on revenue flat at 3.04bn euros ($4.4bn). A decline in the top- and bottom-line contributions from the company's domestic wireline business was balanced by growth in its international mobile operations.