KPN has bought back some 40 percent of its shares over the 2004-2010 period, spending EUR 8.8 billion. In general, this is a way of rewarding shareholders in a fiscally friendly way, while conveying the message that investors need not worry over a risky acquisition strategy. KPN has long felt that its stock is undervalued, which leads the company to buy back shares rather than reduce debt. One could speculate over what KPN would have done with these funds if it hadn't bought back shares. A horizontal takeover (of CanalDigitaal for example) could have been an option. In this Research Brief, we consider a different option in particular: speeding up the roll-out of FTTH (which is currently slowing down) by increasing the capex budget.
