The Dutch telecoms regulator has put KPN, the country's telecoms market leader, under close supervision, saying it may have broken the law to the detriment of consumers and competitors. KPN and other mobile phone operators in the Netherlands are already under investigation by the country's competition authority, known as NMA, for possible price-fixing.
The Post and Telecommunications Authority (OPTA), which was highly critical of KPN's (The Hague, Netherlands) culture and compliance in a report earlier this year, declined to comment on the scope or nature of KPN's infringements and told Reuters its action was "completely separate" from that of NMA.
In a short statement, OPTA said "the risk that KPN is violating OPTA legislation is estimated to be high, with harmful effects on consumers or on the competition," citing "behaviors and violations" by the telecommunications company.
Cynthia Heijne, OPTA's spokeswoman, told Reuters the regulator had already carried out an investigation of KPN and was now taking action on the basis of its findings. OPTA's officers visited KPN's headquarters early on Friday morning to inform the board of directors of their decision, she told Reuters.
OPTA, which is responsible for promoting competition in the communications markets, has far-reaching investigative powers, and its staff may enter the premises, request information, demand disclosure and remove data from a company.
In a report in July, OPTA said it had seen no improvement in KPN's compliance, that "the implementation of regulations is not always ... successful", and that the time taken for implementation was "unacceptable".
It also criticized the corporate culture, noting resistance among employees towards regulatory compliance.
"OPTA is increasingly unhappy about the culture and compliance at KPN, and feel KPN is less sensitive to OPTA's concerns," a person familiar with the discussions told Reuters.
The largest telecommunications provider in the Netherlands has struggled to reverse a decline in revenues, profit and market share in its domestic fixed-line and mobile businesses in recent quarters as competition intensifies.
Earlier this year, KPN said sales in the Netherlands have been particularly hard hit by consumers bypassing traditional mobile phone and text messaging services in favor of keeping in touch via Facebook, Twitter and instant messaging.
The Dutch parliament in June passed a law banning telecommunications providers such as KPN from charging their subscribers extra fees for Internet services such as Skype and instant messaging.
The law is intended to preserve open access to the Internet at a time when some mobile operators in Europe are blocking or charging extra for specific voice over Internet protocol (VOIP) services including Skype and instant messaging.
Historically, network infrastructure is the most expensive component in a mobile operator's overall CAPEX, which holds true in China, the biggest and fastest growing 4G market in the world. This report provides an in-depth overview of market revenue, equipment shipments, and the competitive landscape for carriers. Buy now