Dutch telecom operator KPN reported drop in second-quarter and first-half 2026 revenue, despite accelerating fiber adoption, stronger mobile services, robust SME demand, and disciplined capital investment.
The operator is shifting from an intensive network rollout phase to monetizing its fiber infrastructure through premium broadband, mobile convergence, enterprise digital services, AI infrastructure, and sovereign cloud offerings.
Revenue of KPN fell 0.5 percent to €1,464 million in Q2-2026. Half-year revenue of KPN dropped 0.8 percent to €2,911 billion.
KPN’s Group service revenue increased 0.8 percent year-on-year to €1.46 billion in Q2 2026. Consumer service revenue rose 1.9 percent, SME service revenue climbed 6.9 percent, and Wholesale service revenue increased 1.0 percent. Business service revenue declined 1.1 percent, reflecting lower revenue from Tailored Solutions as KPN continued exiting lower-margin activities to improve profitability.
“Consumer growth improved in both fixed and mobile, supported by our continued focus on customer loyalty and value growth,” KPN CEO Joost Farwerck said.
Fiber business drives broadband revenue growth
Fiber remained the cornerstone of KPN’s growth strategy. During H1 2026, the operator connected 83,000 new fiber homes and activated 41,000 additional fiber homes.
KPN expanded its fiber footprint to 5.97 million homes passed, up from 5.59 million a year earlier. Fiber connections increased to 4.74 million from 4.37 million, while activated fiber homes rose to 2.83 million from 2.63 million.
More than 70 percent of KPN’s retail broadband customers now use fiber, highlighting the continued migration from copper infrastructure.
The investment translated into higher revenue, with fiber broadband service revenue increasing 7.7 percent to €338 million, while copper broadband revenue declined 11 percent to €130 million. Fixed service revenue rose 1.3 percent to €477 million, demonstrating successful monetization of next-generation broadband infrastructure.
Consumer and mobile business gain momentum
KPN’s Consumer business continued strengthening during the quarter. Consumer service revenue growth improved from 1.1 percent in Q2 2025 to 1.2 percent in Q3 2025, 1.3 percent in Q4 2025, 1.3 percent in Q1 2026 and 1.9 percent in Q2 2026.
Mobile service revenue increased 3.2 percent, rising from €226 million to €234 million, while fixed service revenue increased from €472 million to €477 million.
Mobile ARPU returned to growth at €17, while fixed ARPU reached €54. KPN reported that 61 percent of fixed customers and 67 percent of mobile customers now subscribe to converged services.
The operator added 18,000 postpaid mobile customers and 4,000 broadband customers during Q2 2026.
Mobile service revenue growth also accelerated from 1.3 percent in Q2 2025 to 1.0 percent in Q3 2025, 2.9 percent in Q4 2025, 2.3 percent in Q1 2026 and 3.2 percent in Q2 2026, supported by higher ARPU, postpaid additions and bundled offerings.
SME and enterprise digital services strengthen
KPN’s enterprise strategy continued shifting toward higher-value digital services.
SME revenue increased 6.9 percent to €207 million, supported by broadband, mobile, cloud and workplace solutions. Large Corporate Enterprise revenue declined 1.0 percent to €183 million, although mobile, CPaaS and cybersecurity services partially offset weakness in traditional connectivity.
Tailored Solutions revenue fell 19 percent to €72 million, reflecting KPN’s strategy to reduce lower-margin contracts and improve profitability.
Wholesale business remains resilient
Wholesale service revenue increased 1.0 percent to €173 million during Q2 2026.
Wholesale mobile service revenue grew 8.9 percent, supported by international sponsored roaming and visitor roaming. Fiber wholesale broadband revenue increased 3.6 percent, while copper wholesale broadband revenue continued declining due to customer migration toward fiber.
Wholesale service revenue growth moderated from 8.1 percent in Q2 2025 to 5.2 percent in Q3 2025, 3.9 percent in Q4 2025, 0.8 percent in Q1 2026 and 1.0 percent in Q2 2026 as exceptional growth normalized.
Capex
Capital expenditure declined slightly to €587 million from €592 million.
AI infrastructure and sovereign cloud expand growth opportunities
KPN strengthened its enterprise AI and cloud strategy through a partnership with Schwarz Digits to launch a sovereign cloud platform in the Netherlands. The initiative targets enterprises, governments and regulated industries seeking AI-ready cloud infrastructure that complies with European data sovereignty regulations.
2026 outlook remains unchanged
KPN reaffirmed its FY2026 guidance, expecting approximately 1.5 percent service revenue growth, with stronger growth of approximately 2 percent to 2.5 percent during the second half.
The operator maintained its forecast for adjusted EBITDA after leases of approximately €2.67 billion, capital expenditure of around €1.25 billion, and free cash flow of more than €950 million.
KPN also reiterated its medium-term targets for approximately 3 percent compound annual growth in service revenue, approximately 3 percent CAGR in adjusted EBITDA after leases and approximately 7 percent CAGR in free cash flow over the 2024-2027 strategy period.
KPN’s Q2 2026 performance highlights the growing importance of fiber monetization, converged mobile services, enterprise digital transformation, sovereign cloud infrastructure and AI-enabled platforms as European telecom operators transition from network builders to digital infrastructure providers.
FASNA SHABEER