Malone's Liberty cuts European growth targets
TV3 and VirginMedia owner Liberty Global lowered its growth target for Europe this year as billionaire John Malone’s cable carrier reported a weaker-than-expected start in the UK.
Liberty now forecasts operating cash flow growth of 5pc for 2017, down from February’s outlook of 6pc to 7pc, the London-based company said on Sunday. The operator lost more customers than expected in the UK in the first quarter, following two price increases last year and challenges with the launch of a new video product. Mobile revenue also declined.
“The UK is our biggest market, so it has a big impact,” chief executive officer Mike Fries said. He cast the new target as conservative. The reduction is “more of a bump in the road”.
The business is facing stiff competition in Britain from BT Group and Vodafone as the country’s carriers expand on each other’s turfs. A Dutch joint venture that moved ahead with Vodafone in the quarter is doing well in the fixed-line consumer business, but facing challenges in mobile amid competition from its rivals Tele2 AB and Deutsche Telekom AG’s T-Mobile, Mr Fries said.
“The real magic will happen when we can start marketing a true quad-play product,” Fries said of the joint venture, which reported a 2pc revenue decline in the first quarter and 6pc drop in operating cash flow. Mr Fries said he didn’t have anything new to say on whether the partnership could be a prelude to a larger deal between the two firms.
Investors have been fixated on the idea of a merger or asset swap between Liberty and Vodafone, after years of talks between the companies. Even after the agreement to partner in the Netherlands, Mr Fries and Vodafone CEO Vittorio Colao have stoked speculation by publicly commenting on the potential to bring their fixed and mobile assets together.
Liberty is also seen as a potential buyer of UK broadcaster ITV, where it is has a 9.9pc stake – particularly after last week’s announcement that ITV CEO Adam Crozier will step down in June. Buying ITV would add to a growing free-to-air television business that includes TV stations in Belgium and TV3, including the former UTV Ireland, in this country.
Mr Fries said he doesn’t see any more immediate deals in the area on the horizon, however. In the UK and Ireland Liberty said 158,000 net customers joined. Mobile revenue fell 9pc and average revenue per unit increased 1pc. (Bloomberg)