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UPDATE 2-Dutch telecoms group KPN says CEO to step down, names successor
October 20, 2017 / 10:04 AM / 2 months ago

UPDATE 2-Dutch telecoms group KPN says CEO to step down, names successor

(Adds analyst’s comment)

AMSTERDAM, Oct 20 (Reuters) - Dutch telecoms group KPN said on Friday Chief Executive Eelco Blok is to step down in April, to be replaced by Maximo Ibarra, the former head of Italian mobile network operator Wind Tre .

Blok, 60, said in a statement it was “time for a change” after seven years in the top job at KPN.

Blok oversaw a difficult period for KPN beginning in 2011, during which mobile software applications such as WhatsApp destroyed margins on its SMS text message business among retail customers, while business customers steadily cut spending and demanded lower-cost services.

KPN shares are down 8.5 percent over the past five years, compared with a 62 percent rise for the benchmark Dutch AEX index. Its outlook for 2017 is for core operational earnings “in line” with 2016, after years of declines. The company reports third quarter earnings Oct. 26.

”We have been able to make KPN stronger, more flexible and the leader in sustainability, during challenging times for the industry,” Blok said.

KPN’s supervisory board Chairman Duco Sickinghe praised Blok for restoring the company’s “customer loyalty and reputation, providing a solid platform for growth.”

He said that Ibarra, an Italian-Colombian who oversaw the merger last year of Wind Telecomunicazione and 3 Italia , will lead KPN into its “next phase”.

Ibarra, aged 48, stepped down as head of Wind Tre in June with Wind Tre owners CK Hutchison Holdings Ltd and VEON appointing Jeffery Hedberg in his place.

Analysts for Bernstein said Ibarra’s nomination was a somewhat surprising choice for KPN which has never not had a Dutch CEO.

“Ibarra has an illustrious 24-year career with a strong slant towards consumer-centric roles at Vodafone, Benetton and Wind Tre,” they said in a note on his appointment.

However, KPN’s greatest challenge was in the business-to-business segment where revenues continued to decline whereas KPN already had a strong position in its consumer market.

“We give Mr. Ibarra the benefit of the doubt but believe that this will be the litmus test of his leadership skills,” Bernstein’s analysts said.

KPN’s shares were down 0.6 percent at 2.96 euros at 0954 GMT, 0944GMT.

With limited growth potential in its home market, KPN has been building up a cyber security business with the help of some small acquisitions.

Its main competitor on the highly concentrated Dutch telecommunications market is Ziggo, a joint venture between Vodafone and Liberty Global.

KPN has previously been regarded as a takeover target, but the one actual bid, made by Carlos Slim’s America Movil , failed in 2013 due to the strength of opposition from the company’s board and an independent foundation run by prominent Dutch lawyers and businessmen. (Reporting by Toby Sterling; Editing by Greg Mahlich)

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