KPN, the Dutch incumbent telecoms operator, said on Wednesday its cost-cutting efforts were beginning to bear fruit as it forecast flat earnings, rather than further attrition, in its main Netherlands business for the year thanks to fewer fixed-line subscriber defections.

Hundreds of thousands of subscribers have cancelled their domestic phone connections in the last few years, switching to cable television providers or mobile phones. The firm said it cut the number of cancellations to 40,000 in the second quarter from 70,000 in the first quarter, the fifth successive decline.