Combining fixed and mobile failing to deliver synergies, says Fries

Liberty Global CEO, Mike Fries

Combining fixed and mobile assets and marketing quad-play services has so far failed to deliver significant synergies and the mobile business remains under pressure globally, according to Liberty Global president and CEO Mike Fries.

Speaking to analysts after Liberty Global’s financial results, Fries said that he hadn’t “yet seen what the real advantages are from combining fixed and mobile” and added that Liberty had yet to see “real synergies” realized from putting fixed and mobile businesses together in Belgium and the Netherlands, where it operates a joint venture with mobile giant Vodafone.

Fries said that Liberty was still “at the starting gate when it comes to quad-play” in markets including the Netherlands, Belgium and the UK, where it has recently started marketing mobile services more aggressively.

“We haven’t yet converged them to the point where we can start showing you the benefits of quad-play,” he said, adding that the mobile business remained in “a transition phase” for Liberty.

Whiel there is plenty of room for ARPU growth in European markets for the fixed business, Fries said the mobile business faced significant structural challenges globally. He said the mobile business was highly competitive and could come under pressure quickly and unpredictably.

Liberty Global’s financials were hit by poor performance in mobile in its largest markets in the first quarter, with mobile revenues across the group down 5%, despite post-paid growth.

In a critical assessment of the company’s Q1 performance, Fries said that “recent operational and commercial challenges” had contributed to the poorer than expected financials.

“I’m not happy about it and neither is anyone else from Liberty on this call,” he said.

Referring to Liberty Global’s problems with its Project Lightning high-speed fixed broadband build-out in the UK, where the company was recently forced to restate the number of homes it had connected as a result of misreporting by some managers involved in the project, Fries said that “the Project Lightning reboot is underway with a new team and a new reporting structure”. He added that Virgin Media was already seeing improvements in churn and ARPU thanks to  the introduction of new bundles and offers.