Telenet Buys Belgian Telecom Operator BASE for EUR 1.3 Billion

Dutch telecom group KPN said Monday it was selling its Belgian mobile phone operator BASE to cable group Telenet for EUR 1.325 billion ($1.43 billion).

The deal -- which will have to be approved by regulators - will allow Telenet, owned by US giant Liberty Global, to reinforce its fixed line and internet services in Belgium, and take ownership of BASE's mobile network.

BASE is the third biggest mobile operator in Belgium with 3.3 million subscribers and 2014 turnover of EUR 690 million, behind rivals Proximus and Mobistar - whose mobile network Telenet currently relies on for mobile access.

Telenet chairman John Porter said, "Through the acquisition of BASE we have made a significant step to secure long-term mobile access conditions, ensuring we are well positioned to effectively compete for the future growth opportunity of mobile data."

(Also See: US FCC to Open Up Valuable Airwaves for Tech and Telecom Companies)

The merging companies posted combined adjusted revenues of EUR 2.4 billion, and are expected to generate EUR 150 million in new synergies - notably by migrating Telenet mobile customers to the BASE network.

Telenet said it will invest EUR 240 million in coming years, some of which will go towards facilitating BASE's integration and to further develop its mobile infrastructure.

That funding will come atop EUR 500 million in investment funds previously set aside to upgrade Telenet's hybrid fibre/coax network to boost client connection speed.

The company said in a statement it plans to finance the acquisition using EUR 1 billion of existing liquidities and new debt.

The transaction comes after KPN's February announcement of continuing declines in net profit, due largely to tightening activity in the business market and rising competition from free Internet call services such as Skype.

The sale of BASE sees KPN fully focusing on its domestic Dutch activities, after selling its other foreign affiliate -- German operator E-Plus -- to Spain's Telefonica group last October for EUR 5 billion and a 20.5 percent stake in Telefonica Deutschland.

BASE had been on the block in 2012, but no deal was ever concluded due to insufficient purchase offers.

According to press reports, KPN had hoped to obtain EUR 1.8 billion for its Belgian unit.