Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Liberty Global Ltd (LBTYA, Financial) is on track with the Sunrise spin-off, expected to deliver a significant dividend to shareholders.
- The company has announced a comprehensive agreement with Vodafone in the UK, strengthening their mobile network sharing agreement.
- Liberty Global Ltd (LBTYA) has reached 5 million fiber homes across VMO2 and nexfibre, with plans to accelerate the build-out.
- The company has successfully executed $650 million in asset sales over the last six months, supporting deleveraging and strategic investments.
- Liberty Global Ltd (LBTYA) maintains a strong balance sheet with a long-term, fixed-rate debt profile and no material maturities until 2028.
Negative Points
- Liberty Global Ltd (LBTYA) is facing increased competition and market pressure, particularly in the mobile sector.
- The company has lowered its revenue growth guidance for VMO2 due to slower hardware sales in the mobile business.
- Telenet experienced a 9% year-over-year decline in EBITDA, impacted by higher staff-related expenses and increased sales and marketing costs.
- Virgin Media O2 reported a 1% decrease in adjusted EBITDA, influenced by reduced B2B fixed contributions and ongoing investments in IT and digital efficiency programs.
- The competitive dynamics in the Swiss market remain intense, with high promotional activity and pressure on mobile ARPUs.
Q & A Highlights
Q: Can you provide details on the fiber rollout at Virgin Media O2, specifically how many premises are ready for sale and the number of broadband customers on the fiber infrastructure?
A: Mike Fries (CEO) explained that the 5 million fiber premises include both nexfibre and VMO2 upgrades. While they are connecting customers on nexfibre, they are taking their time converting HFC customers to fiber. Lutz Schüler (CEO, Virgin Media O2) added that they are well-positioned with their HFC network and have consciously decided not to start selling fiber yet, as customers are not leaving due to fiber.
Q: What is driving the broadband customer losses at Virgin Media O2, and are you seeing more impact from Altnets or a soft market?
A: Lutz Schüler (CEO, Virgin Media O2) acknowledged increased activities from Altnets and aggressive promotions but noted that they managed to keep their base stable during the price rise quarter. They have also increased ARPU and fixed service revenue for the first time in three years. Schüler mentioned that while they are behind in their ambition for nexfibre, they expect it to become a growth driver by the end of the year.
Q: Can you elaborate on the Belgian memorandum of understanding with Proximus and the terms of mutual wholesale access?
A: John Porter (CEO, Telenet Group Holding NV) clarified that it is a reciprocal passive deal where Telenet will build 60% and Proximus 40% in the collaboration zone. The principle of a non-discriminatory regime will be in place, ensuring open and fair access.
Q: What are the competitive dynamics in the Swiss market, and how are promotional activities affecting your financials and KPIs?
A: André Krause (CEO, Sunrise & UPC) described the market as highly promotional but noted a wearing-off effect. They have seen strong inflow due to new features like the Flex upgrade program and increased HFC speeds. Krause mentioned that they have reduced churn and improved service capabilities, leading to positive dynamics in their inflow and overall market position.
Q: How does the current situation with Altnets in the UK affect potential consolidation, and could regulatory challenges arise from acquiring customers from distressed companies like TalkTalk?
A: Mike Fries (CEO) noted that while Altnets are focusing more on selling than building, it is too early to determine the broader market impact. He mentioned that they are watching the situation with TalkTalk but did not provide specific details on potential acquisitions. Andrea Salvato (Chairman, Nexfibre Networks Limited) added that value expectations need to be reset before material consolidation can occur.
Q: Can you discuss your pricing strategy in the Netherlands, especially in comparison to KPN's price increase?
A: Ritchy Drost (Interim CEO & CFO, VodafoneZiggo Group B.V.) explained that their price increase is slightly below inflation to maintain a balanced price-value perception. He noted that the inflation rate in the Netherlands has fallen, and their decision reflects the need to stay competitive while managing customer expectations.
Q: Are there any scenarios where Liberty Global might be interested in acquiring assets from TalkTalk, given their current situation?
A: Mike Fries (CEO) stated that they are watching the situation with TalkTalk but did not provide specific details on potential acquisitions. He emphasized that they are focused on their competitive position and market dynamics.
Q: How does the NetCo and ServCo model help Liberty Global participate better in fintech, entertainment, healthcare, etc.?
A: Mike Fries (CEO) mentioned that both NetCo and ServCo are better positioned to compete long-term and take their fair share of the ecosystem. He highlighted that the model allows for more agile management and product development, which could help them capitalize on new opportunities in various sectors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
