KPN Launches Mobile Discount Operator In Germany

AMSTERDAM -(Dow Jones)- Dutch telecommunications company KPN (KPN) said in a press statement Monday that E-Plus, KPN's German mobile unit, has ushered in a new mobile phone market segment in Germany.

From now on, the new brand simyo will begin the online sale of SIM cards offering discount rates for mobile calls. It is aimed at customers who attach great importance to no-frills mobile telephony and who regularly use the Internet. simyo has set up its own tariff, characterised by maximum transparency and simplicity as well as economy.

Customers only need remember two prices: a per-minute charge of EUR0.19 around the clock for all calls within Germany, and EUR0.14 for sending a text message.

"No frills" mobile telephony: no extras, but great prices. At the heart of the simyo business model is the idea of stripping down to essentials. Customers buy and top up their SIM cards online. Customers are not tied to a contract and there are no preset amounts for topping up the card.

In return, the customer consciously chooses to go without all services that would add to the cost - subsidised mobile handsets, free 24-hour customer hotline or advice in a shop.

"The model is comparable with the principle of 'no frills' providers in the airline market: the customer goes without extras but flies at a discount price - without having to put up with any loss of quality," explains Uwe Bergheim, CEO of E-Plus.

The company said the German market is ripe for new offers and brands. In other European countries mobile discount providers have been around for a while. Last year alone, twelve new discounters appeared across the continent. In Denmark discounters now account for over 20 per cent of the total market and about 40 per cent of new customers. Market research shows that "demand for a simple, low-cost tariff is high.

Around 60 per cent of customers in Germany would consider doing without individual advice and a cheap mobile if it meant they could make cheaper calls," explains Uwe Bergheim. "The German market is ripe for new business models."

Guy Demuynck, Member of the KPN Board responsible for mobile activities: "We have consistently risen to the challenge of introducing innovation and reform to the German mobile market in the past; with the launch of simyo, we are doing so again, this time opening a whole new segment. We are confident that the introduction of simyo will help us achieve our ambitious goals for further profitable growth at E-Plus."

Company Web site: http://www.kpn.com

(END) Dow Jones Newswires"

Posted to the site on 30th May 2005