On Thursday, 27 March 2025, Liberty Global (NASDAQ: LBTYA) participated in the New Street Research and BCG Future of Connectivity Leaders Conference. CEO Mike Fries shared a cautiously optimistic view of the telecommunications industry, emphasizing both opportunities and challenges. Key topics included strategic initiatives, AI potential, and regulatory shifts.
Key Takeaways
- Liberty Global is focusing on separating infrastructure and services to unlock value.
- AI is seen as a transformative force for operational efficiency and customer experience.
- The regulatory environment is moving towards deregulation, which could boost investment.
- Liberty Global is actively pursuing strategic asset sales and potential M&A opportunities.
- The company maintains an optimistic outlook on the industry’s future.
Industry Overview and Regulatory Environment
- The telecommunications industry is cautiously optimistic about the future.
- There is a perceived shift towards deregulation in Europe and the US, which could stimulate investment and innovation.
- Fries highlighted the need for a level playing field and fair returns on investment, noting the disparity between Europe’s 120 mobile operators and the US’s 3.
Liberty Global’s Strategy and Operations
- Liberty Global is implementing a Netco/Servco separation to create a new infrastructure asset class.
- Key success factors for Netco include cost management, utilization rates, and wholesale ARPU.
- In Belgium, Liberty Global has achieved a 60%+ utilization rate, demonstrating the strategy’s effectiveness.
- The company’s $3 billion ventures portfolio is focused on tech, content, and infrastructure, with top investments including ITV and Formula E.
- Capital rotation is a priority, with planned asset sales to fund stock buybacks and strategic initiatives.
AI and Innovation
- AI offers potential for reducing operational expenses by $200-$300 million.
- Opportunities include call center optimization and network outage reduction.
- Liberty Global is focusing on partnerships with tech companies to drive consumer innovation and hyper-personalization.
M&A and Future Outlook
- Liberty Global’s M&A strategy targets existing markets, with potential opportunities in the UK and Holland.
- The company is not currently planning to increase its stake in Vodafone Ziggo but remains open to opportunities.
- Fries remains optimistic about the industry’s future, driven by connectivity demand and AI potential.
Important Quotes
- "It doesn’t cost anything to deregulate. It’s free. You don’t have to tax anybody. It’s a win-win."
- "Our role in this ecosystem is critical. We are the digital railways for everything, AI and everything beyond."
For more detailed insights, please refer to the full transcript below.
Full transcript - New Street Research and BCG Future of Connectivity Leaders Conference:
Unidentified speaker, Host: Welcome, Mike. Thank you very much for joining us today. It’s a real honor to have you here. You don’t need much in the form of introductions, I think. But just in case, you know, over three decades in the industry, you run one of the largest converged telcos in the world.
You’re also, the chairman of Latin America. So I think you have an amazingly broad view of what goes on in this industry. Of course, through, through your ventures portfolio, you’re also active in many different markets beyond the telco space, which we’ll talk about as well. So really looking forward to the perspective you can give us here. And maybe given the sort of global view you have, maybe we start very high level.
Our industry at the moment. You can take a sort of glass half empty view if you really want, looking at TSR, looking at pressure on the top line, competition, especially in Europe when you’re looking at these markets with you know, quite a large number of operators compared to some other parts of the world. You could take a glass half full view and say, you know, after COVID, in the age of scaling AI, actually, I think everyone is more aware than ever of how important connectivity and how important telcos are to all of our lives, to business, to society, to governments and so on. What’s your take on the industry sort of broadly?
Mike Fries, CEO, Liberty Global: That’s a great question. Good way to start. As you said, I have been operating in this industry for thirty five years, so long time. And I have seen or I guess I’ve read all the chapters. I’ve lived all the chapters, right?
I remember, of course, pre Internet. When CNN and MTV, all we could do was we couldn’t get it out there fast enough. And, of course, the rise of the Internet, the Internet bubble, the race for broadband market share, you know, drive for convergence, which we led to a large degree, all the CapEx cycles that James has been writing about for however long he’s been writing about them, all the disruption, right, that we’ve experienced with streaming and big tech guys, and also what I would describe as the sort of regulatory paralysis or purgatory, whatever you want to say. And that’s where I’ll start because quite frankly, if you look back over our industry, John Malone likes to say this all the time, you live long enough, you see everything twice. We’ve seen it all.
And regulators have this incredible impact in ways that we don’t realize in the moment always, but over time are clear. And we’ve only ever asked for three things in this industry. We’ve asked for some kind of level playing field. We’ve asked for some ability to consolidate and build scale, given how critical we are, apparently, and the right to get some kind of return on our investment. And historically, we have been very bad at that.
We have lost most of those battles. Right? We certainly lost the level playing field battle. Net neutrality, for those who are old enough to remember, we lost that battle and here we are today. You know, big tech runs the show.
We lost the battle on consolidation. There’s 120 mobile operators in this region. Just in Europe alone, there’s only three in America. Explain that, makes no sense. And certainly, we’ve lost a battle on returns because there’s an obsession with prices to the exclusion of investment and innovation in Europe.
It’s always been the case with the lowest prices in the modern world really. So as a result, our stocks have been this is where I thought we were going. Our stocks have been tough last eight years in particular. Now having said that, I’m a glass half full guy. You can’t be in this business as long as I have been and not be an optimist.
And there are real reasons to be positive, I think. There are some real there’s real, you know, things occurring here, some green shoots. Number one, regulators seem to have woken up, whether it’s the Drahi report or what’s happening geopolitically. I don’t know. But it’s clear that they see how important our our network and infrastructure is and how we have been really regulated to a point where our you know, we’ll survive.
But we’re not investing, we’re not innovating. It’s a huge gap to Europe’s 20, 30 goals. €200,000,000,000 has to be spent. So they’re starting to realize that if they’re gonna get it right in Europe, they gotta back off. And in this country as well, you’ve seen that, you know, this government has made it clear that regulation will not be the reason that they don’t seek investment, that we don’t grow.
And that’s smart because it doesn’t cost anything to deregulate. It’s free. You don’t have to tax anybody. It’s a win win. So, you know, I’m positive commercial momentum is returning slowly.
I think, you know, we’re starting to see the end of the CapEx cycle, the latest CapEx cycle. And stocks are up, right? You would know they’re up, I think, 15%. I mean, it’s been a good year to date. It’s one of the best performing sectors.
And it’s still cheap if there’s any equity players out there. We’re still really cheap compared to historical valuations, compared to the market valuations and compared to, you know, where we each see ourselves and sort of some of the parts or whatever you can do. But there’s a reason to be positive, and I remain positive. I think you have to be optimistic. You know, the ecosystem is kind of bending our way.
We deliver 10 times as much data today as we did five years ago. It’s going nowhere but up. So our role in this ecosystem is critical. We are the digital railways for everything, AI and everything beyond. You know, I I think there’s reason to be positive.
Unidentified speaker, Host: Yeah. And you talked about sort of regulation, and hopefully, it’s going in the right direction. What about sort of innovation? You you were at Mobile with Congress as well. Right?
What did you take away? What sense did you get there? What stuck out?
Mike Fries, CEO, Liberty Global: Well, I think if we’re being honest with one another, there’s no return on five g zero in the retail segment. You have to have it. It’s a hygiene factor. But the only reason to go to five gs SA is for enterprise. So the most interesting things I saw in Barcelona were around b two b.
The things that we can do with this network in a sophisticated way, the ability to essentially build private networks, customize networks, for principally enterprise consumers. That’s super exciting. What Open Gateway, the initiative that GSMA has been pushing where we, as an industry of 6,000,000,000 cell phones, can actually get together so that, you know, there’s a you have to build one API to integrate with everybody globally. There’s some things happening in in the industry that are really exciting, but they’re mostly around enterprise. I would say the consumer innovation is slow, And I’m not that I mean, do I need an I don’t have the iPhone 16.
Should I get it? I don’t know. I mean, what’s pushing consumer excitement in the mobile space? Pricing. That’s the problem.
If it’s cheaper, they want it. If it’s better, they’re not so sure. So I think we have a long way to go on the consumer side.
Unidentified speaker, Host: Yes. Very interesting. Thank you. And I think, maybe taking it a little bit to Liberty now specifically and picking up on where you just left off in terms of mass market or b two b. I mean, of course, one of the things you’ve done for many years very very successfully is played the FMC game.
Now, you’re doing a bit more of the unbundling in terms of the retail core, Servco, if you wanna call it, netco. You’ve done that very successfully in Belgium with wire. It’s now, you know, underway in The UK with VM02. What in your view is required to actually drive shareholder value and and the successful setup of a Netco? What have you sort of learned there?
Because, of course, not everyone is finding that journey particularly easily easy in the in the industry. Yeah.
Mike Fries, CEO, Liberty Global: It’s interesting. Just building on the regulatory point, people when you’re in The US, people are confused by delayering. They go, what what do you mean Netco, Servco? Why are you doing this? How did it come about?
And the truth is, you know, we have, again, regulators to blame because they forced incumbents to open up networks that devalued the network, it allowed anybody with a brand to get into the retail business, and created a new revenue stream called wholesale, and here we are today. That’s my explanation for it. But I think you need a few things to be I mean, why is it interesting? Why do we have to be looking at it? The economics are different, right?
The valuations are higher in an infrastructure company. The cost of capital is lower. You can put more debt on an infrastructure asset. So we created this, really, this new asset class is what it is. That’s really the only way to think about it.
It’s it’s not sophisticated. It’s not highly technological. It’s a new asset class and a new financial engineering program for a lot of players. Now it has, you know and it only works if three things add up, and only three things. You can sit through a million meetings on this.
It’s just three things, the cost to build, utilization rate, and the wholesale ARPU. If you can get those three things right, I mean, fourth would be market structure because we were just talking about this market where there’s 100 people building fiber. Most of those will not be here in a year or two or they just can’t be because, again, these are railways. You can’t have 100 railways to the same destination. So there will be a shakeout here.
And the reason is those three things: cost to build, utilization rate and wholesale ARPU. So getting that right in a particular market is not easy, it doesn’t work everywhere. And where it doesn’t work, there’s a third thing you have to get right, and that is alignment between the netco and the Servco. Are these two entities incented properly to drive growth, migration, all those good things? You have good talent on both sides.
So the relationship between the two entities is also quite critical and not easy not easy at all. We’re we’re already there in in Belgium because the regulator there forced us to open up our cable networks, which is a first on the planet, but we did it. And that’s an example of a winner because we already have 60 plus percent utilization on the network. Just to put that into comparison, I mean, we have 35%, forty % on our networks of our own customers. I think the average out of that is 10% or something.
We’re at 60 something percent in Belgium. So we’ve got the economics right. And secondly, we’re going to have the we’re likely to restructure the fiber market so that the market structure is right with really just one of us. We’re working with the incumbent there to share the fiber market. So, the government seems to have realized, I don’t need two fiber networks.
How about just one? You do it here, you do it there, and we’ll use each other. So, it’s becoming that kind of commodity, that railway. And, so in some circumstances, it works. In others, it doesn’t.
But it’s those are the drivers. I mean, I rattled a lot of things up, but those are the real drivers. You may have a different view, but to me, those are the real drivers.
Unidentified speaker, Host: Well, one area actually, Mike, I’d love to follow-up on is in the kind of the corollary to the infra co is and how we create value on the Servco side as well. And I was super interested by the point you raised on what you saw in Barcelona about growth on the B2B side and innovation there. If you’re kind of thinking now about what’s it take to then be a winner on the Servco side, I think we’ve talked about B2B with cable businesses for years and probably fair to say the growth there has never quite been fulfilled. Do you think now that’s actually a turning point for these Servco businesses?
Mike Fries, CEO, Liberty Global: Well, let’s talk about Servco’s because I think, again, it’s highly situational. Every Servco we’ve been involved with or may be involved with still owns its mobile network. So it’s a it’s the relationship between Servco and Netco really only deals with the fixed network. Right? In Belgium, we own the Servco owns a mobile network.
If we’re to do it here, VMO two is going to own the mobile network. And if for some people believe that’s where all the juice and excitement is anyway, that all this growth in b2b enterprise, not ICTs, that’s not that stuff, but all the, you know, network slicing, all these things are happening on the mobile network. And that’s the exciting thing anyway. That fiber thing, we just have to have that. We don’t know that we want it, we’re happy to rent it, happy to own it, Not so sure.
So when we talk about Netco Servco, let’s be sure to remember that these Servcos actually are highly network dependent. They’re owners of mobile networks. That’s that’s point one. And I think whether you own it or rent it in the fixed network side of things, if you want to be a successful Servco in b2b or in b2c, you have to have access to incredible network capability because that will be, you know, your main success factor. Do I or don’t I have access to a great network whether I own it or rent it?
Then you have to do everything else right. You have to have all the commercial tools in your toolbox. You have to be able to differentiate with loyalty programs or quality of service or great call center activities. You have to be able to, you know, be able to have a product that that people want. You have to have brands that serve every segment.
Then you need all the AI and digital tools behind it to drive pricing into each of those segments. I mean, you Servcos have to get everything right to be successful. And it’s the same things we have to do whether you’re integrated or not integrated. So I’m I’m I’m optimistic that, you know, those outline just a few of them. You know, differentiation, brand, multiple brands, flanker brands, customer segmentation, all the tools to allow you to be to manage your base, drive dynamic pricing, all the things that we’re doing across our footprint.
These are critical tools in the toolbox to be successful in a competitive retail environment. On the enterprise side, how can you not be excited by ICT? In in Switzerland, in Sunrise, where we have maybe 20% market share or something like that in in traditional connectivity, the ICT sector is 10 times bigger, and we’ve got no market share. Now it’s lower margin. Connectivity has good margins.
ICT has differentiated margins depending on what you’re selling. But, you know, cloud services, all of these intelligent services that we’re all just starting to get into, it’s exciting. We need partners to do that, whether it’s people like Google or AWS or Accenture or ECG. We need partners to build these skills and capabilities. But we’re 20% market share in the connectivity business.
That means 80% is somewhere else. We should be bigger. And it’s 20 of our revenue on average. So we’ve got a long way to go in the enterprise space.
Unidentified speaker, Host: When you look at your kind of Servco assets, what where do you see over the next few years you think there’s the opportunity for Liberty Global to be, let’s say, most differentiated and to compete most strongly against your peers?
Mike Fries, CEO, Liberty Global: So every market has a different superpower. Right? In Holland, our superpower is content. ZIGO Sports has UEFA rights, we used to have F1 rights. It’s an incredible brand.
It was the fifth highest rated TV channel, and we’re not even a TV channel or premium cable channel. So in that market, I think content has been a superpower. We have to keep differentiating there. Here, I think our superpower, quite frankly, in The UK has been these AI and digital tools. Our ability we’re seeing in our fixed broadband base.
Our ability to dynamically price product, we have 6,000,000 plus or minus customers. We have six something like 100,000 different pricing plans. That means we’re not the segment of one yet. We’re in a segment of 60, but that’s pretty important to be able when that person calls, you’ve got something to retain. So, we’re seeing ARPU grow in the fixed business.
So, that I think we have great brands here, of course, O2, Virgin Media, they’re great brands. But I think our superpower historically or more recently has been this ability to manage our base and manage customer segments. In Switzerland, it’s brand. Sunrise in Switzerland is an incredible product and their loyalty programs there. We have Roger Federer, we have Swiss ski team, people want to be part of that.
So we have a great product with one of the best mobile networks on the planet. Everything’s great, but I think the Sunrise brand I think is really critical there. And there’s a few things. It depends in each market, but we’re pushing all the same buttons. We want each of those things to work.
Unidentified speaker, Host: And maybe to start talking a little bit about
Mike Fries, CEO, Liberty Global: some of
Unidentified speaker, Host: the other activities you’ve been doing across Liberty growth. I mean, I actually think there’s not a lot of examples of telcos that have been as active as you have been in terms of building up a real ventures portfolio. And there’s some really sizable ones along sort of tech in terms of plume content. You’ve got formula E, infrastructure, Atlas, Edge, and the like. How do you think about these assets sort of as part of the larger group?
Are they strategic investments? Are they sort of tactical investments that you plan to scale up as stand alone? Do you think of them as integrating back into your business at all? Some of them, what do you think of them?
Mike Fries, CEO, Liberty Global: Well, it’s a mixed bag. So we are three big silo. Liberty Telecom is our 80,000,000 connections, 22,000,000,000 revenue. That’s a telecom business. Liberty Services, which we can talk about is how we’re what we’re doing at the central company for tech and finance and things of that nature, which we talk about.
And then Liberty Growth is what you’re describing. So $3,000,000,000 portfolio today, three principal verticals, tech, content, media and infrastructure. And from my point of view, it looks fragmented and complicated from the outside, 70 investments, how do I keep track of this, but seven investments represent 75% of the value. Seven. Three of them are media.
We own 10% of ITV. We own a piece of a platform called VC Univision, which is the largest Spanish language streamer and broadcaster in the world, and we own Formula E, sixty five percent of it. And then on the infrastructure side, we own Atlas Edge, EdgeConnects and Next Fiber here in The UK. So those six, and then we have 5% of Vodafone, which we would like to be, you know, a higher price, but we’re working on it. But, those seven things represent 75% of the value.
And they also kind of in isolation or looking at each of them are sort of where we think our strengths are. In infrastructure, listen, the demand for power connectivity, cooling, space is insatiable. So we’re using our own infrastructure to step into those data center opportunities, and that’s what we’ve done with Atlas Edge. In sports, it’s not easy to own a global sports franchise. We own one called Formula E.
It’s the fastest growing racing platform, still small, with 400,000,000 viewers around the world or fans growing 25% a year. But so many things are going right there. I mean, just a longer conversation, but that’s the kind of thing it’s it can be really valuable over the next, you know, three to five years. I would say this about the growth platform. If we are to make more investments, they will not be dozens and dozens of small things.
They will be larger, scalable, strategic positions. So we may do none. We may not find anything. So we’re going to be a lot more discriminating than perhaps we may have been in the last ten years. Secondly, it’s a great source of capital.
So if you follow our story, and I don’t know if any of you do, but rotating capital around is a big thing for us. So we sold 900,000,000 worth of assets last year, and we used a lot of that money to buy stock and percent of the shares, but also to get our Swiss business public to delever that business. We’ve said publicly we’ll sell 500,000,000 to $750,000,000 this year. So it’s a source of capital for us, which is really the right thing. You have to be disciplined about capital allocation.
So having said all of that, since we’ve spun off Sunrise and our market cap is now understandably lower because we’ve spun off a big chunk of the business, it’s become a larger piece of the puzzle. You have to talk about it. We have to get you to understand it, and we have to be more transparent about what we’re gonna do with it, which we have been and will be. By the way, that spin is a perfect example of, you know, this market feeling better. Just to give you quick quick stats, we took 20% of our proportionate EBITDA, spun it out into a Swiss publicly traded stock, and in the process, gave our investors a tax free $9 dividend on what was an $18 stock.
So we we gave a $9 tax free dividend on what was an $18 stock by spinning off 20% of our proportionate EBITDA. Why? Because in our holding company, it was valued at five and a half, but the Swiss investors love it at eight times EBITDA because it’s got a dividend. It’s more so there are ways of creating value. This is where we’re different than BTU.
We’re different than Vodafone. We just are thinking differently about how we create value for shareholders. If there’s any shareholders out there, this is what we spend a lot of time thinking about is how do we create value at the end of this process, this journey. And that’s just one example of how we’ve done it.
Unidentified speaker, Host: If we think about how you rotate capital around and create value and, like, what’s reflected in the share price, I’m sure we could debate that for hours. But maybe one area that’s maybe not fully valued is the Liberty Growth portfolio. And I mean, is that, therefore, an area that over time you could potentially want to kind of extract capital from on a net basis to highlight that value more clearly to shareholders? Or do you see this as a kind of longer term play where you would actually be net contributors of capital into that venture?
Mike Fries, CEO, Liberty Global: To me, it’s a great question, and the answer is it all depends. What do I mean by that? We’ve said this publicly. To me, the Liberty Telecom side of our business, the MO2, all the businesses you know and love and write about, there’s a lot of embedded value there. I just demonstrated that in the Switzerland example.
If we have to put capital into those businesses, we will to get to a not an endgame per se, but a better state of value crystallization, monetization, whatever it looks like. And if I have to take capital out of growth to do that, we’ll do it like we did last year. And but however, if there’s an incredible opportunity, we might put more capital in. But I think right now, we’re a net, we’re exiting on a net basis out of the growth portfolio and putting that and as you say, demonstrating the value of those assets as we do it and putting that money to good work, either back into unique but really differentiated investments in growth or as fuel for our Liberty Telecom strategies, really more strategic strategies versus the operational strategies to create value for shareholders.
Unidentified speaker, Host: I suppose, I’m afraid I have to ask this, but a kind of natural segue, Mike, for what you just said is if you would think about rotating capital, one of the areas that’s been reported recently you might be interested in is putting some of that capital into increasing your stake in Vodafone ZIGO.
Mike Fries, CEO, Liberty Global: What would you say to that?
Unidentified speaker, Host: Is that, you know, a parcel and create value through merging it with Telenet? It’s just great to get your thoughts on Yeah. Anything you can say on that
Mike Fries, CEO, Liberty Global: at the moment. Obviously, I can’t say anything. There’s nothing to say. I mean, you peep don’t feel bad because people have asked me the same question for eight or nine years. That’s a good and a really good partnership with Vodafone.
I I really feel like, you know, we’re always opportunistic, but nothing to add to that.
Unidentified speaker, Host: Okay. We’ll watch this space. But then maybe one area that maybe I could then press you for more kind of general about M and A is you’ve done a lot of successful in market FMC transactions, industrial mergers here in The UK. Obviously, Vodafone Ziggo was part of that, Sunrise UPC. Where do you see the kind of next leg of, let’s say, industrial M and A for Liberty Global if I think about your core assets?
Mike Fries, CEO, Liberty Global: Yes. Well, first of all, I would start in the markets we’re in. I don’t see us necessarily adding one or two or three new markets. I think we’re we like where we are, and we’re going to focus capital and attention on those businesses. This market, obviously, there will be a lot of M and A in the AltNet space.
It’s just going to happen. Whether we’re involved or not involved, watch this space. Let’s see what goes on there. Ireland, we don’t have a mobile asset there. We might look at complementing that.
It’s the one market, but we don’t have a mobile asset. We have nothing on the books. There’s no transaction to describe it. Theoretically, down the road, that could be something we would look at. Belgium, we’re in the process of really rationalizing the fiber market.
So I don’t see us necessarily we’re already investing in a wire, which is our netco there. In Holland, look at there’s a couple Holland, there’s two alt nets in Holland, and we’ve had lots of conversations, you would expect us to, about market rationalization and so far nothing’s popped. But they’re private equity owned and at some point they might be interesting opportunities for us, but that’s probably all I can comment on.
Unidentified speaker, Host: And, small pivot given time is running, and I wouldn’t be a good adviser if I wasn’t bringing GenAI back on the table. I think you’ve mentioned the the work that BMO two is doing. We’ve heard all about AI at Mobile World Congress. We’re talking about GenTech, all these things. Where do you see the biggest opportunities for Liberty Global in leveraging AI slash GenAI, however you want to exactly call it?
And then also maybe just a little add on question. And how do you think about managing that across the group? You have four opcos. You have a center. How do you drive that to scale to value?
Yeah.
Mike Fries, CEO, Liberty Global: Listen, I think, the telco sector is going to benefit from AI in really meaningful ways, but very marginal ways. What do I mean by that? If I look at the things that we’re doing, basic stuff. Right? Make the call center experience happier, faster, reduce call handling times, check.
Make sure you’re consuming power on the radio access network only when you need it, reduce power consumption, check. Reduce network outages and truck rolls, check. These are all really important things, but they’re they’re not game changers. When you add them all up, it’s a pretty big number because a small number multiplied by a big number is a big number. I learned that a long time ago.
And so we will we’ve said publicly two, three hundred million of OpEx, one to 2%. We’re going to get there. So for our industry, there are so many opportunities. You’re helping us think those through. So many opportunities where we can improve marginal economics, marginal customer experience, marginal retention.
But you add all that up, it’s big. So we’re doing that because if we don’t do it, we have to do that. But it feels to me like we’re just scratching the surface. I mean, I said this maybe I said this in World Congress on stage. I felt like a year ago, it was a 10 kilometer race and we were 100 meters in, but I 10 kilometers, I can do that.
Now it feels like a 100 kilometer race and we’re 110 meters in. The things that we’re looking at, that we’re talking about, that you’re working on are incredible. You know, the ability to take your network and basically go to an enterprise customer and say, whatever you need, I’m opening it up to you. Build, design, whatever you need for your business, your enterprise, your customers, and it’s not one size fits all. We now we walk in with a piece of paper like them and say, hey.
You want a, b, or c? You know, pick your choice. So those kinds of things are incredible. The hyper personalization that doesn’t exist today. Okay.
It’s one thing to say, I call up, you quickly know who I am, you get me to the right agent, but that’s not what you’re working on. What what what you know, we wanna have this ability to actually know you’re gonna call before you call. In fact, don’t even allow you to call. Call you and tell you exactly what’s going on and get you to understand the products and opportunities in front of you. And then if it’s us or an agent or a bot, I mean, these, you know, have other pros and cons, but that will all happen.
In energy consumption, I think there’s gonna be globally. I think AI is 10%, twenty %, thirty % of reductions in energy consumption that could be transformational for data centers for all these other areas. So we are just scratching the surface. I’m excited about the future, but I feel like we’re just walking. We’re not running yet.
And I’m trying to push my team to start thinking about the race.
Unidentified speaker, Host: I think you’re a little I personally think you’re further than 110 meters, but, yeah, there’s a long way to go, of course. I have one last question from my side that I think is a is a very for me, a very interesting and important one. I mean, I’ve worked with you and your teams for many years now, and I’ve always found it quite unique how you balance tactical market actions and really longer term strategy and how in extremely value and then shareholder value driven you are and how close you are to the business. How do you think about leadership in the context of sort of quite a complex company as Liberty Global? What are sort of some of the principles that drive your style of running this firm?
Mike Fries, CEO, Liberty Global: Well, I’ll try to say something original. That’s not easy, because you get the same answer from any CEO. Look. I do believe it starts with people. In our case, what’s different, on average, I’ve worked with my core team between fifteen and thirty years.
I think when you have that kind of history with people where you’ve seen the good days and you’ve got a lot of scar tissue from the bad days, it’s really valuable. So having a core team around you, not just a talented team, but a team where there’s trust, where there’s alignment, where there’s accountability, I think that is the most important thing for any leader to be able to get things done. I would say being agile, it sounds super fancy consulting term. But if I look at our history, we were in 50 countries at one point. Now I’m talking about four and five.
Why did we move? Why did we exit Asia? Why did we spin off Latin America? Why did we get out of France and Norway and Sweden? That’s a longer conversation, but I’m happy to talk about it.
Being agile with your asset base, being agile with your strategy, being able to pivot, change direction is critical. And then thirdly, being able to turn around to your people and then tell them why you did that and have them go, you know what? That makes perfect sense to me because I know about what we stand for. I understand our purpose. I understand our culture.
I wanna work here out of the way. So you you can’t do those three things. You can’t be, you know, super successful, be agile, make 80 returns, change strategies when needed, and then have the team, the broader company, follow you along if you don’t have a culture that people want to be part of that. And, and I maybe lastly, you’ve got to stay optimistic. You know, you started out by saying, are you glass half full?
I’m definitely a glass half full guy. In principle, I think you have to be. You gotta be realistic. You gotta be disciplined. You gotta be honest.
But if you’re not optimistic, I mean, this is the coolest ecosystem to be in right now of any ecosystem. I don’t want to be in the car business. I don’t really want to be in the pharmaceutical business. I want to be in this business because this is where the heat, the light, the excitement, the energy is. And, you know, we’re it doesn’t happen without us.
The key question is how do we do it, create some value along the way, make sure it’s not all going to the Silicon Valley guys or any regulators aren’t damaging the business model. I mean, so there’s a lot to get it right, but it’s an awfully exciting place to be working.
Unidentified speaker, Host: I finished with maybe one last question. That was
Mike Fries, CEO, Liberty Global: such an ending. I don’t know.
Unidentified speaker, Host: Sorry. Sorry. It is a backside thing.
Mike Fries, CEO, Liberty Global: I thought Let’s go back to ARPU.
Unidentified speaker, Host: We’ve got no. No. Not ARPUs, but to go back to to the topic of innovation
Mike Fries, CEO, Liberty Global: Of course. Of course.
Unidentified speaker, Host: To your show. Because, and consumer innovation is a glass half full guy because that was probably the one thing I heard you say where actually it didn’t sound quite as glass half full as I thought it might be. And I’m just trying to think about how could we think about consumer innovation? We’ve seen, I think, some of your other telcos start selling, let’s say, other products along side it? Could you look at maybe different pricing strategies in different regions?
How can we become, let’s say, glass half full on the consumer innovation side?
Mike Fries, CEO, Liberty Global: Well, the good news there is we have partners. Right? Apple is in creating incredible stuff. Perplexity, anybody use Perplexity, is, I think, the single best search engine, AI engine out there, and they’re doing deals with us. Right?
We we are exclusively distributing perplexity in this market like we did Spotify or Disney plus So partnering with Big Tech, partnering with the Magnificent Seven, whatever you want to call them, partnering with these folks because their innovation cycle when it comes to consumer products and services is much better than ours. But if we don’t have it, we can’t deliver it. If we can’t find ways to package it and bundle it and get it to our customers, then we’re not benefiting. So to me, it’s a partnership on the consumer side with folks who are just better at it than we are. We can be creative on pricing and we are.
We can do really smart things like loyalty and multiple brands and slice and dice segments, and we’ll do all that. I think AI will have a meaningful impact on the customer experience we ultimately are delivering. When? TBD. Exactly what it looks like, we’ll find out.
But that hyper personalization, just to give you a catch all phrase, that’s going to change the game for consumers. We’re working on some skunk work startups. You know, I’m in the business now of not hiring people, but hiring entrepreneurs and just saying, okay, you got that, fine. We’ll fund you. Here’s an office.
If it works, it’s ours. If it’s not, on to the next thing. And there are some really cool business models around AI advertising, mobile thing that will, I think, change the game. I mean, smart home is a terrible term, but there’s a reason why it doesn’t exist. So whoever gets that right, that will be interesting.
So that there’s lots of innovation happening behind the scene. I didn’t he asked me specifically at Mobile World Congress.
Unidentified speaker, Host: Okay. Yep.
Mike Fries, CEO, Liberty Global: And I said, there, I really saw enterprise innovation, but there’s a lot of stuff happening.
Unidentified speaker, Host: Well, there we go. That is a good glass half full note to finish on. So, yeah, on behalf of Max and myself, yeah, Mike, thank you so much indeed for being with us today.
Mike Fries, CEO, Liberty Global: Thanks. Good to see you all.
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