October 26, 2017 / 6:49 AM / a year ago

UPDATE 1-Dutch telco KPN's Q3 profit hurt by roaming rules

* Q3 adjusted op profit 636 million euros, in line with f’casts

* Sees roaming rules taking 40-50 mln eur off adj EBITDA in 2017 (Adds detail)

AMSTERDAM, Oct 26 (Reuters) - European rules limiting roaming fees for the use of mobile phones abroad took a bite out of Dutch telecom company KPN’s third-quarter profit, the company said on Thursday.

KPN reported a 4 percent drop in adjusted operating profit (EBITDA) to 636 million euros ($753 million), as revenue declined 6.6 percent to 1.6 billion. The results were in line with expectations of analysts polled by Reuters.

Lower income was attributed to the “roam like at home” regulation enforced in June, which bars telecom companies for charging extra fees for the use of mobile phones while travelling within the European Union.

This led to a strong increase in data usage abroad during the summer holidays, Chief Executive Eelco Blok said in a statement. Excluding the impact of regulation, core profit was 0.6 percent lower than last year, while revenue fell 2 percent.

The Netherlands’ largest telecom company expects roaming regulation to take 40 to 50 million euros off its adjusted EBITDA in 2017, maintaining the outlook that the total result will be in line with last year’s 2.4 billion euros.

But roaming rules are not KPN’s only problem, as business customers increasingly switch from traditional fixed lines to cheaper alternatives. This led to a 5 percent revenue decline for the division, whose sales will probably keep falling for the next two to four years, as Blok said in July.

On the consumer side, the loss of roaming fees was partly offset by a growing customer base, with customers buying an increasing amount of mobile, internet and television services.

Last week KPN said Blok is to step down in April, to be replaced by Maximo Ibarra, former head of Italian mobile network operator Wind Tre. ($1 = 0.8451 euros) (Reporting by Bart Meijer; Editing by Biju Dwarakanath and David Holmes)

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