KPN suffered a terrible start to the year with profits haemorraghing ahead of the sale of E-Plus to Telefónica.

Net profit was down 98 percent year-on-year to just €3 million in the first three months of 2014, partly due to the phasing out of a handset leasing arrangement in the Netherlands.

Group revenues fell 8.2 percent to €2 billion, with the operator’s enterprise business unit particularly badly affected – sales fell 11 percent as the market continued to decline due to what KPN described as “customer rationalisation and optimisation”.

In its Dutch consumer business, sales from fixed voice, broadband and IPTV fell 3.6 percent despite ARPU increasing by five percent and its share of the TV market increasing from 24 percent to 26 percent.

Meanwhile, mobile revenues declined 12 percent due to the continued shift towards “no frills” tariffs.

However, CEO Eelco Blok said the operator remained “substantially ahead” of the competition following the completion of its 4G LTE roll-out.

[Read more: KPN reappoints CEO, announces “remarkable” nationwide 4G coverage, 1m subs]

“These investments can now be scaled back leading to lower capex levels,” he added.

Outside of its home market, revenues in Belgium, where KPN owns BASE, fell 3.3 percent.

[Read more: BASE to offer 4G LTE for free as Belgium set for price war]

The only real plus point was KPN’s German business E-Plus, which registered a 2.5 percent increase in revenues.

Ironically, this is the unit that KPN is selling to Telefónica.

Blok commented: “The E-Plus sale is currently subject to a Phase II review by the European Commission. We are confident we will obtain regulatory approval in June and that the sale will complete shortly thereafter.”

KPN also pointed to the first results of its “simplification” programme, which aims to reduce both opex and capex by more than €300 million per annum by 2016.

The operator said its consumer residential business phased out around 90 percent of its broadband service packages in Q1 2014.

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