Liberty Global combats customer losses with new products and price hikes

Liberty Global has reported an 8.2% decrease in revenues for Q3 2022, rebased to a 3.7% increase of $1.75bn. It added that the Q3 financial performance was “highlighted by accelerating Adjusted EBITDA at VM02, Vodafone Ziggo and Telenet.”

Liberty Global CEO, Mike Fries

Adjusted EBITDA was down 12.5% on a reported basis, and up 1.6% rebased, to US$664 million.

Overall the picture was one in which new products and price hikes offset a decline in customers, with organic customer net losses hitting 37,800 for the year to date (nine months), including 14,000 losses in Q3.

Customer losses were particularly marked in Belgium, where Telenet lost 7,700 customers in Q3 alone.

Commenting on the results, CEO Mike Fries said, “Despite the macroeconomic challenges in Europe we have a resilient business model, as demonstrated by our solid results in Q3. Connectivity remains an essential service with strong demand across our footprint for reliable and seamless access to high-quality fixed and mobile networks. We also remain focused on supporting our customers who are experiencing higher living costs by offering connectivity services that are affordable and robust.”

Financially, said Fries, “we reported stable to growing revenues in Switzerland, Belgium and the Netherlands, with the latter two markets supported by recent price adjustments. Synergy execution, price rises and cost controls supported Adjusted EBITDA growth in the UK, Belgium and the Netherlands. Meanwhile, synergies in the UK are expected to drive cash flow growth throughout the remainder of the year.”

In terms of network development strategies, he said: “Each of our markets has attractive investment opportunities utilising combinations of FTTH and DOCSIS and we are already offering gigabit speeds to customers across nearly 100% of our footprint. In the UK, we continue to advance our Lightning build-out while upgrading the existing HFC network to FTTH. We are also setting up the new fibre JV with Infravia to build the additional 5 to 7 million homes that we announced last quarter.”

Operating highlights

Among operating highlights, Liberty Global said 2020 Swiss acquisition Sunrise continues to deliver strong mobile performance, supported by robust B2B delivery and its flanker brand yallo which continues to perform well as the business generates revenue growth in Q3. Sunrise continues to reinforce yallo’s full service offerings, launching yallo Free TV for new and prospective customers.

There was also continued growth at Belgium’s Telenet “driven by continued uptake of “ONE(Up)” bundles”. As for VMO2 in the UK, Liberty Global said the company “continued growing its fixed and mobile customer base in Q3 while announcing the UK’s fastest WiFi guarantee. Less than a year after the launch of VMO2’s first FMC bundle, a significant milestone has been achieved with more than 1 million customers taking a Volt bundle, highlighting substantial progress in fixed-mobile convergence.”

In the Dutch market, VodafoneZiggo improved its commercial momentum despite “increased promotional intensity”. The company “implemented an average 3.5% price increase as of July 2022 which helped generate rebased revenue growth in Q3.”