Great deal by KPN. They take yet another pain in the buttocks of the market. Instead of competing they can now cooperate and at leas for a while accelerate the roll out of FTTH. A joint attack on Cable? What really interests me is why 41%? Does Regge fall above or below accounting treshholds? Could it be that this is a way for KPN to do FTTH in certain areas without having to show it in the books? Could it be a ploy to invest in FTTH without hurting the stock price too much? (Depending on what the contract looks like it could be a loan shaped like a deal where KPN agrees to buy the network at a price when it has reached a certain size/profitability)
An interesting question is how cable will react. If it can react at all. Two years ago 3 cable companies were bought by private equity for 5.2 billion euro or 1500 per sub. This company Ziggo (used to be Zesko) has about half the market another sizeable chunck going to UPC. For 2007 they reported a 274 million loss (mostly due to 450 million interest payments). If KPN attacks with both technology and excellent product management, than these cable companies might find themselves outwitted. At the moment I don't think KPN will be content just to sit around and do nothing, but this might all change when a large enough piece of the market has been cornered.
What I find interesting for KPN as well is that it is in an excellent position to use this deal for both fixed as well as wireless networks. Their 3G and 4G network could just be plugged on top of this investment, leveraging the fibre assets, something none of its competitors can do at the moment.
For the backhaul market this is also an interesting deal. Regge owns Eurofiber, which had sizeable fiber assets throughout the country on backhaul routes, selling mostly dark fibre (or purple fiber) I know quite a bit of companies that bought Eurofiber to get rid of KPN. Eurofiber's new (nick)name may be KPN Fiber Wholesale. UPDATE I should have read the press release better, Eurofiber is explicitely excluded from the deal.
For the regulator this will be a tough deal to look at. There are multiple angles to look at this deal. One could say that three competing infrastructures is not a viable option anyways. One could say that this doesn't really change anything to the current competitive landscape as Reggefiber currently is mostly a story, an element in business plans or an investor in the background and only very locally a real force to reckon with. So if the NMA or OPTA sais no and Regge sais that they won't invest anymore than nothing has changed. Another option may be to split of Eurofiber and some other assets. Not allowing the investment is also an option, but does that also mean projects like Almere are not allowed? In a changing industry this would go to far.