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KPN core earnings fall on business customers, tax issue

(Adds more results figures, CEO comments)

By Toby Sterling

AMSTERDAM, Feb 3 (Reuters) - KPN (Amsterdam: KPN.AS - news) , the Netherlands' largest telecommunications company, reported a worse-than-expected drop in fourth-quarter earnings on Wednesday, and forecast stabilised earnings for 2016.

The company said it expected adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2016 would be in line with 2015 after years of sliding profits as customer switched to cheaper internet-based voice services.

It (Other OTC: ITGL - news) reported fourth-quarter EBITDA of 582 million euros ($636 million), down 7.6 percent from 630 million euros in the same period a year earlier.

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Analysts polled by Thomson Reuters (Dusseldorf: TOC.DU - news) had expected adjusted EBITDA of 596 million euros. KPN noted the 2015 figures no longer include a 44 million euro tax benefit that has been discontinued under Dutch law.

KPN's business customers have been reducing telecommunications spending, while prices for mobile telephony on the Dutch market have been under pressure. Those trends are slowing and their impact on earnings is increasingly offset by strong growth in mobile data subscriptions and KPN's cost-cutting efforts.

"We continue to operate in a challenging business market where customer needs are changing from traditional to new services," Chief Executive Eelco Blok said in a statement.

He said growth in new service offerings would support profitability in the business segment.

For 2016, a top priority would be growing revenue from households, where KPN competes with cable operator Liberty in offering internet and television.

KPN plans 1.2 billion euros in capital spending in 2016, as it tries to build out its fibre optic network to reach 80 percent of Dutch households by year end. ($1 = 0.9157 euros) (Editing by Susan Thomas)