KPN's Head Of Mobile Operations Resigns

AMSTERDAM -(Dow Jones)- Dutch Telecommunications operator Royal KPN Friday said Guy Demuynck, the chief executive of its mobile division, will leave as of July 1 to join another company.

KPN said it will announce a successor for Demuynck soon. Demuynck has been working for KPN since 2003.

Demuynck is also Chief of KPN Mobile in The Netherlands.

KPN said it has asked Maro Visser, director of commercial operations KPN Mobile The Netherlands, to succeed Demuynck as head of the Dutch wireless operations.

Demuynck joined KPN from Royal Philips Electronics, where he had been CEO of the Consumer Electronics Division since 2000.

KPN spokesman Bram Oudshoorn said Demuynck has not said yet which company he will join.

Analysts said his departure is a surprise and the timing of the announcement, only five days ahead of KPN's fourth-quarter earnings report, is peculiar.

"The timing is highly unfortunate," Theodoor Gilissen analyst Wing-Yen Choi said. "This will likely start speculation about the performance of KPN's mobile division, which is already under pressure," he added.

Also, the lack of motivation for the departure and KPN not saying to what company Demuynck is leaving will add to uncertainty, he said. Choi rates KPN a sell.

At 0918 GMT, KPN shares were up 0.5% or EUR0.04 at EUR7.76, in an overall higher market.

KPN Mobile operates in Germany, Belgium and The Netherlands. The division has been under pressure for some time as it operates in highly competitive markets.

In Germany, KPN's E-Plus competes with Telefonica SA's planned takeover O2 PLC for third place in Europe's largest market, behind Deutsche Telekom AG and Vodafone Group PLC, which together have around 75% of the market.

In the Netherlands, KPN bought low-cost operator Telfort in 2005 for EUR1.12 billion, in a defensive move to strengthen its position as market leader.

Thijs Berkelder, analyst at Petercam said, there are several scenario's possible about the reasoning for Demuynck's departure, both positive and negative. He added he didn't want to speculate about the reasons for the departure.

However, Berkelder said "the number of managers that has left KPN under Chief Executive Officer Ad Scheepbouwer's reign is remarkable." Petercam rates KPN reduce.

In 2005, KPN rejigged management of its international wireless operations bringing them under the sole leadership of Stan Miller, the chief executive of the Belgian mobile arm, BASE.

In October of 2005, Uwe Bergheim the Chief Executive Officer of E-Plus, left the company. One year earlier, Cees van den Heijkant, head of KPN Mobile in The Netherlands left KPN.

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

-By Stefan Simons, Dow Jones Newswires; 31 20 6260770; stefan.simons@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 3rd February 2006