Liberty Global has considered buying a mobile operator in the past, according to the company’s CEO. Speaking at the Cable Congress in London, Mike Fries said the global cableco had looked into this “a couple of times”.
He said deals in this space would…
Liberty Global has considered buying a mobile operator in the past, according to the company’s CEO. Speaking at the Cable Congress in London, Mike Fries said the global cableco had looked into this “a couple of times”.
He said deals in this space would be “hard”, explaining: “We have a good business and their [the mobile operator’s] business is challenged”. This would raise questions about the multiples of a combined business.
He also pointed at high capital requirements for operators going forward, including spectrum costs.
Fries described telecoms operators as Liberty’s “single biggest competitors” and predicted that they would solve their current problems such as capital constraints, subscriber losses and regulatory challenges within the next few years. In the meantime Liberty would take advantage of the situation and continue to grow, including by making further acquisitions: “We keep our foot on the gas while they will sort out their problems”.
UK market will see “a dog fight”
Speaking to journalists on the sidelines of the event about the US$23.3bn takeover of Virgin Media in the UK, Fries said he expected closing the transaction in May. Fries also confirmed that the process to find a successor for Neil Berkett, who will step down as CEO of Virgin Media following closure of the merger, has been launched. Liberty was assessing internal possibilities but had also hired a headhunting agency to help with the search internationally.
Asked by TelecomFinance about his view on the acquisition of Telefonica UK’s fixed line assets by BSkyB, Fries predicted “a dog fight” in the UK market going forward. He described it as a smart move for BSkyB, which would give them greater scale and breadth. But intensified competition would be good for the consumer.
BSkyB announced the £200m acquisition of the Telefonica assets shortly after Liberty had agreed to buy Virgin Media. Although a much smaller transaction in size, BSkyB has said the deal will make it the second-largest broadband provider in the UK, overtaking Virgin Media.
Upon completion, BSkyB’s subscriber base, which stood at 4.2 million at the end of 2012, will rise to 4.7 million. Incumbent BT has about 6.6 million subscribers, while Virgin Media has about 4.5 million.
