Liberty Global’s Fries mulls Swiss consolidation and a Dutch buyout

Liberty Global is mulling potential consolidation in the Swiss market and a longer-term decision about whether to buy out Vodafone in its Dutch JV, according to president and CEO Mike Fries.

Liberty Global CEO, Mike Fries

Fries, speaking at the Goldman Sachs’ Communacopia Conference in the US, said that Switzerland remains a “challenging” market and that Liberty was looking at “all of its options” in the country. “Maybe we should just take Switzerland public,” he said, before going on to speculate that “there is only one possible solution” towards consolidation in the market – that being a tie-up with rival Sunrise. Of other two players, he said, Salt had made a negligible impact on the quad-play market and Swisscom was out of play for obvious reasons.

Fries said that Liberty remained committed to investing in Switzerland and described new Swiss CEO Severina Pascu as a “rock star” who would make a difference. The company will launch its EOS box there in the country this year, along with 1Gbps broadband next year, he said. The rollout of EOS is a big part of Liberty’s plan to turnaround the Swiss market, said Fries.

“It’s going to be another tough year next year. Next year will be better but still tough. By 2020 the business will be stable,” he said, and compared the likely trajectory in the country with the Netherlands, where Liberty had also gone through tough times and come through.

Liberty said that Salt, Sunrise and Swisscom are all suffering and current levels of competition are not sustainable. “The market will rationalize,” he said.

Regarding the Netherlands, Fries said that the VodafoneZiggo JV in which Liberty is a 50% partner was making good progress but that there would be a point where the company would have to decide if it was “a buyer or a seller”.

“The fixed business is largely stable…but the mobile business is difficult,” he said. Fixed-mobile convergence “is working”, he said, contributing to higher met promoter scores and lower churn, along with synergies that “look to be on track”.

“The business may be on the point of turning,” he said. “But there will be a moment in the next 24 months where we have to decide – and they have to decide – if we are buyers or sellers of that business and we will have to make that decision at the time.”

Either the company would be taken public or there would be “some sort of change in ownership” he said.