KPN's E-Plus Plans To Sign Virtual Network Deals In Germany

FRANKFURT -(Dow Jones)- Royal KPN NV's (KPN) German mobile phone unit, E-Plus Mobilfunk, Monday said it is stepping up plans to host other companies' mobile phone systems on its network to return the company to a net profit.

Managing Director Uwe Bergheim said the third-largest German mobile phone operator intends to close several such agreements with companies that don't have their own network- so-called mobile virtual network operators, MVNOs.

Bergheim said the company is in talks with a number of interested parties.

In the best case scenario, these deals would more quickly lead to the company's goal of 11 million customers and, thus, a net profit. This is currently scheduled for 2006/2007.

Bergheim said: "If all goes well, we'll come closer to the 11 million users in a shorter time."

Bergheim said E-Plus has significant surplus network capacity which it could sell to MVNOs.

MVNOs such as Virgin Mobile Holdings (UK) PLC (VMOB.LN) of the U.K. don't own their networks but rent capacity from operators to offer cheap deals.

EasyGroup - the firm behind budget airline easyJet PLC (EZY.LN) - recently unveiled plans to launch a low-cost mobile service in the U.K. In Germany, E-Plus rival mmO2 PLC (OOM) has linked with coffee retailer Tchibo Holdings AG (TBH.YY) to offer prepay mobile services to German consumers.

Bergheim said it is conceivable that E-Plus could invest in a MVNO or even create its own.

Bergheim stressed that Duesseldorf-based E-Plus is on track to achieve its mid-term goals. For the coming year, E-Plus is aiming for 10 million customers, even without including MVNOs, he said. In 2004, the number of customers rose to far more than 9 million, he said.

E-Plus wants to concentrate on gaining new contract clients, particularly in the business sector, he added.

Bergheim said 2004 has been a "very good year" with growth in sales and operating results.

The mix of new customers has also improved, he said. The proportion of contract customers could have climbed to 50% in 2004, compared with 47% in 2003.

He also has high hopes for the Christmas business, hoping the fourth quarter will show continuing increases in sales, profit and subscriber numbers.

Company Web site: http://www.eplus.de

-By Stefan Paul Mechnig, Dow Jones Newswires; +49 (0) 211 138 72 13, duesseldorf.de@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 6th December 2004