KPN agrees to acquire Dutch IT services company

In search of new revenue streams to offset declining sales from its tradition telephone business, Dutch telecommunications company Koninklijke KPN has agreed to acquire IT service provider Getronics.

The Dutch network operator announced Monday its plans to pay €766 million ($1.04 billion) for Getronics, which provides computer services to enterprises in the Netherlands, Belgium, the U.K., and North America.

The move comes among a flurry of consolidation in Europe’s highly competitive IT service sector. On Monday, French IT service provider Groupe Steria SCA also agreed to buy U.K. rival Xansa.

By acquiring Getronics, which is based in Amsterdam, KPN aims to take advantage of the convergence under way in the telecommunications and IT service sectors, with many enterprises now seeking to purchase all services from a single supplier that can deliver an end-to-end service, KPN said.

Getronics’s customers are largely manufacturers and financial institutions as well as governments, with the U.S. military being an important client.

KPN isn’t the first European operator to expand into the market for enterprise computer services. BT Group, Deutsche Telekom, and France Télécom have been operating in the market for several years — with varying degrees of success.

Earlier this year, the Global Services division of BT bought International Network Services  (INS) to extend its enterprise services offering in the U.S. The British operator has one of the largest IT service offerings in the sector.

The same can be said of France Télécom’s Orange Business Services. But after failing to turn its T-Systems subsidiary into a profitable operation, Deutsche Telekom said earlier this year that it is interested in finding an international partner for its struggling IT service unit. During its first-ever strike last month, Deutsche Telekom also threatened to sell the unit if an agreement with the labor union couldn’t be reached over longer working hours without additional pay.

Correction: This story as originally posted contained an incorrect conversion of euros to U.S. dollars. The article has been amended.