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Dutch Operator KPN Finds Success In Germany With Cheap Calls, Not Content

By Dianne See Morrison - Wed 19 Dec 2007 04:48 AM PST

Dutch mobile operator KPN has found success in Germany with the cut-rate, no-frills, no subsidized handsets mobile plan it offers through Base, a brand it had imported from Belgium. Indeed, as Businessweek notes in its feature article on KPN, it’s shaken up the Vodafone-T-Mobile “duopoly” in the country. While the two operators are duking it out trying to offer consumers more bells and whistles--witness their bitter battle over the iPhone--KPN has rapidly gained market share by appealing to customers who want a simple, straightforward, inexpensive voice plan.

Base has boosted KPN’s German venture, E-Plus, which has seen its subs rise 16 percent, year-on-year, to 14.1 million. Moreover, its operating profit rose 79 percent during the quarter, to $193 million, while its profit margin of nearly 38 percent is just behind that of Vodafone (NYSE: VOD) in Germany. KPN now hopes to crack the Spanish market with the Base brand and plans on launching there early next year. They have talked of expanding into France, though no concrete plans have been made.

But Businessweek questions what will happen to KPN’s voice-focused mobile plans as the mobile web and multimedia handsets become more commonplace. E-Plus does have an unlimited mobile Internet service that it sells for an extra $36 a month, but it has no web portal of its own that can compete with, say, Vodafone Live.

But KPN at least has time on its side. No content-rich mobile plan has been a hit on either side of the Atlantic. Witness the downfall of Disney’s Mobile ESPN (NYSE: DIS) and its child-friendly service Disney Mobile. Both trumpeted exclusive content as a point of difference, but both struggled to gain subs and were eventually shut down (albeit very quickly). Three UK, the UK operator that has tried to position itself on its cutting edge content offerings, has also had difficulties luring subscribers, and was reduced to offering cheap voice calls instead.

Posted in: Companies, Disney, Operators, 3, MVNO, Disney Mobile, MobileESPN, T-Mobile, Vodafone, Countries, Europe, Germany

Tags: kpn,

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mocoNews.net is a news site covering the business of mobile content.

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Dianne See Morrison
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