KPN merges divisions; buys UK part of KPNQwest

17 September 2002 -- KPN has agreed to buy UK network of its bankrupt data services providing joint venture KPNQwest. Also, the three divisions of KPN are to be merged into two.

17 September 2002 -- Dutch telecoms group KPN NV has reached agreement with the UK receiver of its bankrupt KPNQwest data services providing joint venture with the USA's Qwest Communications Inc to buy the UK part of its network. The main asset is a 500km UK fibre network which connects London with Paris and Amsterdam.

KPN, which had already bought other the Dutch and German parts of KPNQwest's Euro rings network, says it is still in talks to buy assets in Belgium, as well as an undersea link connecting Europe with the USA.

* KPN intends to reduce the number of its divisions from three to two. Thi s will be done by merging the Fixed Network and Business Solutions divisions, leaving a mobile division and a fixed division.
Activities will be clustered according to market segments. The board believes the proposed change will improve KPN's customer focus and responsiveness.

The merger will reduce the number of management board portfolios from five to four. KPN's supervisory board says that Marten Pieters has therefore decided to step down from the board as of 1 October and to leave his operational position as managing director of the Business Solutions division.

At the request of the supervisory board, Pieters will advise the board of management over the coming six months on the sale of non-core assets and continue to serve as a supervisory director of some foreign subsidiaries of KPN.

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