Introduction
A sustainable digital future for all
Three years ago we initiated our Accelerate to Grow strategy. To accelerate our investments in the best infrastructure, enhance the business grow across all segments and further digitalize and simplify the company. This marked a pivotal step in our long-term strategy that now sets us apart in the telecom landscape, particularly in Europe. In 2023, KPN advanced with solid results and a strong appreciation of our accomplishments by our stakeholders.
Fast and secure digital connections
Our networks have proven to be capable of handling the significant increase in data traffic growth and are ready to support future demand. Together with Glaspoort we expanded our fiber footprint with a record number of 725k homes passed in 2023 and we are activating existing and new customers to our services.
Our fiber footprint now covers 57% of the Netherlands. We remain committed to our goal to connect 80% of the Netherlands to fiber by the end of 2026 via KPN and Glaspoort. Simultaneously, we retire obsolete networks and IT systems.
We have upgraded all our mobile network sites and redirected our efforts toward creating solutions that use this infrastructure, collaborating with other innovators. We are preparing the network for the 3.5 GHz spectrum auction, which is expected to take place before summer 2024, so that we can utilize the possibilities of the 5G network.
And with customers making more use of our unlimited mobile propositions we are providing users with a broadband-like experience on their mobile devices. This benefits consumers and holds advantages for businesses and governments that can leverage the benefits of 5G through a private network within their own domains or to support specific business solutions.
KPN will further bolster its position by consistently investing in the digital infrastructure, enhancing the user experience while prioritizing security. For example, we have a unique offer for SME to receive extra secure internet in the broadband line up, at no extra cost. With approximately 40%1 market share in the SME segment, we play a crucial role in protecting entrepreneurs from cybersecurity threats. This aligns well with our societal commitment as a responsible company.
A noteworthy achievement is KPN's revenue growth, supported by all business segments.
Growth across all segments
In the consumer market, positive developments are evident. There is a notable trend among consumers towards unlimited plans and postpaid subscriptions. Additionally, growth in broadband and the shift to most of the customer base being on fiber, generally opting for higher speeds, contribute to the positive uptake. I am very pleased with the new services included we have introduced, such as our new TV+ offering, the new Gaming proposition, super-fast internet based on 4 Gig, the new Mobile line up. In addition, we also invested in the quality of the In-home experience. For instance, we guide customers in making informed choices for smart equipment that seamlessly integrates with all their home devices.
The business market is on an upward path, business service revenues continued to grow, with SME as the main contributor. The LCE segment has experienced a positive transformation on the way to growth. This positive turn is a result of our investments in transitioning services to the cloud and simplifying processes and the rationalization of legacy portfolio. And the Tailored Solutions in B2B is clearly improving on revenues.
A noteworthy achievement is KPN's revenue growth, supported by all business segments. In 2023, KPN turned to organic growth, achieved by consistently executing our plan to attract more customers and encourage them to adopt more services from
us. Offsetting the overall inflationary effects, including additional costs in energy and CLA increase we managed to deliver solid financial results. This overall good performance not only results in attractive shareholder returns, demonstrating our commitment to delivering on our promises but also leads to long-term value.
By 2027, KPN customers will browse the internet through a sustainable and efficient network powered by green energy, largely generated from a new wind farm off the Dutch coast.
For a Better Internet: Responsible, Inclusive and Sustainable
KPN is committed to maintaining its leading ESG position in the telecommunications industry. With our Connect, Activate & Grow strategy we have raised the bar and set ambitious goals on Responsibility, Inclusion and Sustainability which are fully integrated in our business model. In the coming years, KPN will launch new initiatives and make cybersecurity an integral part of its ESG policy, contributing to societal value for the Netherlands. Our motto here is 'For a Better Internet'.
By promoting digital and social inclusion, we strive to enhance society and improve the life of people. With the KPN Mooiste Contact Fonds, KPN continues its efforts to reduce the digital divide for those who cannot easily participate themselves.
We are dedicated to act on the global climate crisis, having worked on this for years and taking further steps to make a difference. Restraining our footprint, we actively strive for a greener future by focusing on energy efficiency and circularity. And we are assisting customers in becoming more sustainable, for example through hybrid working, digitalization and smart (cloud based) solutions.
By 2027, KPN customers will browse the internet through a sustainable and efficient network powered by green energy, largely generated from a new wind farm off the Dutch coast.
By 2030, KPN's actual electricity consumption should have decreased by 48% compared to 2010. Additionally, KPN is aiming for net-zero emissions in the value chain by 2040.
Empowering team excellence
Building upon a skilled and motivated workforce committed to promoting team diversity, our goal is to position KPN as a leading workplace in the Netherlands. We consistently invest in strengthening both teams and individuals, fostering a culture where engagement and enhanced performance are intertwined. Modern facilities, favorable employment terms, and opportunities for talent development are imperative to achieve this goal. We focus on nurturing new talent and encouraging continuous development among our employees.
Working at KPN remains appealing due to contemporary employment conditions, high flexibility and incentives for sustainable commuting options. Our employees are given the space to actively contribute to their personal growth and KPN's societal goals. The results of our investments and initiatives are evident in the robust employee engagement, with colleagues consistently expressing pride in their affiliation with KPN.
While we thrive, the pursuit of talent remains an essential theme. I therefore welcome all talented individuals to see KPN as the starting point for a successful and inspiring career. In our exceptional organization, there is something for everyone as we fulfill our mission for a better internet, to bring people together and let the power of connection flourish.
I firmly believe that KPN is strategically well-positioned to advance towards a sustainable future for all.
Looking ahead: Connect, Activate & Grow
In November 2023, KPN unveiled the Connect, Activate & Grow strategy that will guide our journey over the next four years. In essence, our vision and strategic imperatives will shape a future where KPN stands at the forefront of innovation, connectivity and sustainability.
We aim to solidify our position as the #1 internet company in the Netherlands, lead in mobile revenue market share, and be the preferred partner for digital services and innovations.
With our Connect, Activate & Grow strategy, we are dedicated to create long-term value for all stakeholders and sustaining healthy revenue growth across our business. I firmly believe that KPN is strategically well-positioned to advance towards a sustainable future for all.
Finally, I warmly invite you to explore our online report website where you can share your opinion on thought-provoking topics that hold significance for us and our environment.
Joost Farwerck,
CEO and Chairman of the Board of Management of KPN