Fries: Liberty Global ‘cannot afford to stand still’ on convergence

Liberty Global remains committed to developing convergent offerings despite an ongoing industry-wide decline in mobile revenues, according to president and CEO Mike Fries.

Liberty Global CEO, Mike Fries

Talking to analysts after the cable giant reported its latest quarterly figures, Fries said that “strategically, we cannot afford to stand still, and we are not standing still” in developing a mobile play, despite not knowing “when the structural decline in mobile revenues will hit bottom”.

Fries said that pre-paid mobile subscriber losses, discounting and other factors related to mobile had hit the group’s top-line results in the quarter. Nevertheless, he said, developing a strong convergent play was an imperative for the company.

“Convergence is happening rapidly in Europe and we are on it,” he said, adding that the group’s quad-play offerings had produced lower churn and improved net promoter scores.

Fries said that the group would continue to take a market-by-market approach to mobile, developing MVNOs in most markets and looking at wholly-owned mobile network offerings “where that makes sense”.

Liberty Global’s most significant convergence play so far, its VodafoneZiggo joint-venture with Vodafone in the Netherlands, saw consumer mobile service revenue drop by 7% on a pro-forma basis in the second quarter, despite reversing a decline in contract customers last year to turn in net mobile contract additions of 19,000 in the three months to June. Pre-paid losses for the JV accelerated to 42,000.

On the conference call, Fries said that about 20% of the VodafoneZiggo base took both fixed and mobile services, while 30% of the company’s Belgian base, where it acquired mobile operator BASE from KPN, was converged.

Despite the patchy progress on convergence so far, Fries said that “the trend is in one direction” and that Liberty Global was “connecting the dots between fixed and mobile customers”.