Liberty's Fries: Exciting Times for Cable

Oct. 1, 2014
During the General Session at Expo last Wednesday, Liberty Global (NASDAQ:LBTYA) President and CEO Mike Fries told Tony Werner, EVP ...
During the General Session at Expo last Wednesday, Liberty Global (NASDAQ:LBTYA) President and CEO Mike Fries told Tony Werner, EVP and CTO of Comcast (NASDAQ:CMCSA), that while he has been in business a long time, he has never been "more positive, and more optimistic," about the state of cable despite all the change that is occurring.

"I couldn't be more excited about where we sit as an industry and a company," Fries said.

Fries talked about what he calls the David and Goliath-like battle Liberty Global has waged across Europe as it competes with the "formidable" telcos, some of whom have been the incumbent for 150 years, the resellers trying to disrupt the market, and the satellite operators.

"We (have been) the little guys spending 20% of our revenue every year ... driving innovation, driving speeds ... forcing the incumbents to get their acts together," Fries said.

For Liberty Global, broadband speed is the "killer app," and pretty much everything sold is done so in a bundle. In some locations, like in the United Kingdom where Liberty Global recently acquired Virgin Media, the bundle is a quad-play, including mobile service. The company has 3 million plus mobile subscribers in the UK, which represents a 20% quad-play penetration. Some 90% of mobile sales are to existing video customers, Fries said.

Werner reiterated what he has said a couple times before during this conference, that collaboration in the cable industry and participation in organizations like the SCTE and CableLabs have enabled cable to "punch above its weight."

"It has never been more important than right now ... to work together globally," Fries said. "Our ability to change and innovate and grow is a function of the industry." Fries called the Reference Design Kit (RDK) initiative a "DOCSIS moment." "Why we wouldn't collaborate and rally around a common standard ... makes no sense to me. That is how we will thrive and succeed in the next 20 years."

Fries said WiFi is a "huge development" initiative for Liberty Global, which has 2.5 million homespots. "Making those networks come alive is critically important to us," he said, noting that this is another area where working together globally makes sense.

Ultimately, however, Fries said, fixed connections are still first and foremost, with the goal of connecting customers to unlimited access to the Internet. "(But, then) we want to follow them (out of the house) and give them another reason to connect to our services."

Also during the general session on Wednesday, Yvette Kanouff, SVP and general manager of Cisco's (NASDAQ:CSCO) service provider video software and services solutions group, and Mike LaJoie, EVP and CTO, and chief network operations officer of Time Warner Cable (NYSE:TWC), had a conversation about getting from the "cube to the corner office."

"One of the most important things is that it was never about me and my career progression, but ... about trying to make people around me successful," said LaJoie. "I wanted to put more wood on the pile than I took off."

Kanouff talked about diversity and the importance of mentoring. "(It can be) someone in the company or someone outside ... but someone that looks at you in objective ways and says, 'Here's how you are perceived vs. how you think you are,' is so valuable."