Liberty Global Boss Warns of Brexit Impact on U.K. Cable Business
CEO Mike Fries, whose company runs Virgin Media, told shareholders he remains committed to broadband investment in the U.K. as its economy falters.
Mike Fries, CEO of Liberty Global, on Wednesday warned shareholders about headwinds in the U.K. cable and broadband market from Brexit, even as it steps up capital investment as Britain negotiates to leave the EU.
"The U.K. economy is moving. Inflation is a little bit higher, discretionary income is a little bit lower. That does impact us and others in our business," said Fries, whose company operates Virgin Media in the U.K., during an annual shareholder meeting that was webcast.
The Brexit negotiations come at a delicate time for Liberty Global, as it invests heavily in bringing new products and ultrafast 5G technologies to its pan-European cable portfolio, including Virgin Media, just as the economy in Britain, a key market, throws up political, regulatory and economic uncertainty.
Fries said U.K. consumers are increasingly price-conscious as the economy falters. "Fifty pounds a month isn't super cheap. It's cheap compared to the U.S., where people pay about $150 for the same product.... But it's not inexpensive. We're mindful of that," the Liberty Global boss said.
Fries, with Virgin Media CEO Tom Mockridge at his side, told investors Liberty Global remains committed to broadband investment in the U.K., despite economic challenges. "We're investing considerable amounts of money in our broadcast networks and our video platforms. Our view is we need to give people more for more," Fries said as Virgin Media stares down competition from British Telecom, Sky and others.
And he argued "skittish" shareholders pulling back on the Liberty Global share price should be investing for the long term. "There has been some expectation that perhaps there was some M&A upside here — that we were going to go out and buy someone, or someone was going to buy us," Fries said of speculation that Comcast or AT&T could take a run at Liberty Global, which has cable king John Malone as a major investor.
"We're all in," Fries told shareholders. "We're in this for the long haul. We're about creating value for the long term."