Liberty Global has ‘strong turnaround plan’ for UPC Switzerland

Liberty Global’s struggling Swiss business remains “highly cash-generative” with attractive cash-flow, giving the company “strategic options” as the Swiss market “looks to consolidate and rationalise”, according to CEO Mike Fries.

Speaking to analysts as the company posted its Q2 results, Fries said that Liberty had “a pretty strong turnaround plan for Switzerland” but that this could take “multiple years” to bear fruit. He said the company’s new leadership team under Severina Pascu had a good track record to this respect.

He declined to be specific about any plans for consolidation or potential divestment of the Swiss business, but said that the company would assess opportunities as they arise.

“The market does require some consolidation, and any observer would say the same,” he said. “At the end of the day we’re sort of the fulcrum asset there, so we’ll see what opportunities arise. But fundamentally we’re focused on organically turning the business around.”

Fries said that the MySports premium TV offering recently launched in by UPC Switzerland was “not the main driver” of the turnaround plan, which would focus on stabilizing the video business and the rollout of the company’s next-generation EOS set-top box, already launched by Virgin Media in the UK as the V6.

Fries said that a “state-of-the-art video platform and service” was the “number one thing” that would make a difference in the Swiss market.

UPC Switzerland’s revenues dipped by 1.9% in the quarter to June and its operating cash-flow dropped by 11% thanks to customer losses and costs associated with the launch of MySports platform.

Liberty Global’s Q2 performance leaned heavily on UK unit Virgin Media’s strong performance, which compensated for a weaker showing elsewhere. On the analyst call, Fries admitted that Liberty’s Telenet operation in Belgium and its Dutch JV with Vodafone were “facing some form of competitive pressure in either fixed or mobile or both”.