Netherlands telecommunications operator Royal KPN is offering 1 billion U.S. dollars for Dutch computer-services provider Getronics with hopes of turning the struggling company into a profit-maker.

KPN's offer appears a good price considering Getronics' first-half net loss of 108 million euros (147.5 million dollars), down 130 million euros (177.6 million dollars) from a profit of 22 million euros (30.1 million dollars) in the corresponding period a year earlier. The company said on Monday that it was guiding for a full-year loss, partly due to a 50 million euro (68.3 million dollar) goodwill charge on its underperforming U.S. operations.

"Nobody's really combined the IT and the telecoms world," said Chris Lewis, analyst with Ovum Research. But he added that integrating computer services would help operators such as KPN strengthen their revenue streams, currently under threat from falling prices for fixed telephony and a saturated mobile market.

"Telecommunications and IT services are increasingly becoming two sides of the same coin," said Ad Scheepbouwer, chief executive of KPN. "More and more companies are converging their telecoms and IT requirements, sourcing all services from a single end-to-end vendor."

Although Ovum's Lewis said KPN faces a challenge bringing Getronics back to profitability, he added that Scheepbouwer had done a successful job with KPN itself. The company was close to collapse back in 2001, with debts of more than 15 billion euros (20.5 billion dollars), but it gradually worked its way back to solid profits and cash flow through a strict diet of cost-cutting and slashed capital expenditure.

"KPN also set up a new information and communication technology division," said Lewis, "which is a sign that it is starting to take it seriously."