Liberty Global targets UK with plan to build 800k new homes in ‘17

Liberty Global will spend about US$1 billion on capital expenditure this year, with nine tenths to be spent on extending and upgrading its broadband network, particularly in the UK, where the operator has targeted passing an additional 800,000 homes in 2017.

Speaking to analysts after the cable giant unveiled strong end-of-year figures at the end of last week, Liberty Global president and CEO Mike Fries said that the company was upping its Project Lightning UK new build programme from 465,000 homes last year to 800,000 this year.

Fries said that about 15% on the planned new-build in the UK would be “larger turnkey projects” targeting new towns and urban areas rather than filling gaps in existing areas and connecting multiple dwelling units.

He said he believed Virgin Media was on track to achieve 40% penetration in new-build areas within three years, after averaging 32% within 15 months in areas where it has already built out new networks.

In a presentation in which Fries several times emphasised the importance of the UK to Liberty’s overall strategy, he said that he saw a strong opportunity for fixed-mobile convergence in the market. Following the extension of its MVNO agreement with BT, Virgin Media will bring its existing mobile customers onto its core platform to enable it to offer “true converged bundles”, said Fries, adding that no other operator is doing this in the UK currently.

“We believe quad-play penetration across the group should be 30-40% over the medium term,” said Fries, speaking about Liberty Global’s total European footprint.

Answering an analyst question on 5G mobile, Fries said it was still an emerging technology, but added that the company would be involved in developing services. “We’re in the mobile business and we intend to be even more successful in the mobile business over the next three to five years so we will be a 5G provider,” he said.

In addition to its UK investment, Liberty is also planning to modestly increase the number of homes it will build out in Germany this year, from 80,000 to 100,000, but will scale back in central and eastern Europe, building out a further 400,000 homes compared with 590,000 last year. Fries said the group would focus on marketing to higher value homes in this region.

Asked about Liberty’s emerging content strategy, Fries repeated his oft-used line about “being opportunistic” and approaching opportunities on a market-by-market basis. He played down speculation that the company could make a larger acquisition by noting that “there are no Disneys or Time-Warners in Europe”.