KPN shares drop 15% on dividend cuts

Shares in Dutch telecoms group KPN, now part of Mexican tycoon Carlos Slim’s empire, plunged as much as 15 per cent after it cut its dividend for this year and next to meet the higher-than-expected cost of new mobile licences.

A new player, Sweden’s Tele2, also won licences in Friday’s Dutch auction of 4G wireless spectrum. The fallout from the auction is the latest blow for KPN after cut-throat competition in text messaging and slowing European economies led it to cut profit and dividend forecasts, its chief financial officer abruptly left and competition authorities launched a probe into possible price fixing.

Some analysts also questioned whether the dividend cut would be enough, suggesting the group might have to sell assets or raise capital to fend off credit rating downgrades. - (Reuters)