There is an old Dutch saying: "you have to sow, if you expect to reap." The Amsterdam-based Koninklije KPN NV has gone along with that advice, and done a lot of sowing. It has invested in new businesses, bought operating licenses which may allow it to grow beyond its small national market, and sought international alliances. But it's not clear that the company will be able to spend enough to reap the rewards it is hoping for.
All that sowing has meant that KPN is facing a corporate finance problem.
Much has gone badly for the Dutch telecommunications company since last summer, when Spain's Telefonica pulled out of a potential full-scale partnership. Although KPN is the national champion telecommunications provider in the Netherlands, it's no more than a medium sized player in the European market. "KPN needs to expand, because its subscriber base is too small to support any considerable growth," says Gert de Mesure, an analyst with Delta Securities in Antwerp.
As there are reportedly no discussions underway with other potential partners, KPN has been obliged to fund its attempts at expansion alone. The effort has not gone well.