Cable operators must embrace mobile, says Liberty Global

Diederik Karsten

Cable operators will increasingly find it hard to compete if they don’t offer mobile services, according to Liberty Global executive Diederik Karsten.

Speaking at Cable Congress in Amsterdam, Karsten, who is Liberty’s executive vice president of broadband operations, said that mobile now an incremental part of the firm’s service portfolio and “makes our product complete.”

“I find it hard to name a market in Europe where a cable operator could be successful, continue their success over the next 10 years, [or] try to compete with a relatively strong incumbent, without a mobile product.”

In 2012 Liberty Global signed Mobile Virtual Network Operator (MVNO) partnerships in six markets – Germany, the Netherlands, Belgium, Austria, Poland and Hungary.

However, in general terms, Karsten admitted that the “jury is still out” on this model of licensing spectrum from another operator in order to offer mobile services.

“If you look back at the MVNO model, some people say it has never proven itself. At the end of the day you always get into a margin squeeze between the operators and the exterior economics due to the managing of the network and the retail,” said Karsten.

He added that mobile operators do not always welcome potential MVNO partners as friends. “It’s well known to all the others [within the mobile industry] that we can take quite a big chunk or revenue out in a period where revenue is eroding – that’s also a reason why we are being cautious.”

Speaking on the same panel, titled Cable Challenges Across Europe, former Virgin Media executive and current executive chairman at Sweden’s Com Hem, Andrew Barron, said that mobile is “an absolutely fundamental piece over time of what we all will be doing.”

However, he said that layering an MVNO offering on top of Com Hem’s existing services was not something it was pursuing as part of its current growth strategy.

“If you don’t have mobile as a cable operator, it doesn’t make you a bad company. Com Hem doesn’t have mobile. Com Hem has huge growth opportunities, I believe, but mobile needn’t be the one we lead with,” said Barron.