Liberty Global CEO Sees Mobile Services as Important Growth Driver for Cable Firms

By Archibald Preuschat 

COLOGNE, Germany--Mobile phone services are an important driver of growth for traditional cable network operators, Michael Fries, chief executive of Liberty Global, said in an interview Tuesday.

Mr. Fries indicated Liberty Global, controlled by U.S. media mogul John Malone, has little appetite to acquire mobile assets following a recent deal in Belgium for mobile-network operator Base.

His remarks follow recent comments from Vodafone Ltd., the world's second-biggest mobile firm, that it was in talks with Liberty Global on an asset swap. Mr. Fries declined to discuss the issue.

Offering bundled packages with TV, fixed-line telephony, Internet and mobile services--so called quad-play services -- "is an important piece of the puzzle," Mr. Fries said. Mobile services in particular are "an interesting growth driver," he said, adding Liberty Global needs to add mobile services because competing telecom firms also offer quad-play-products.

"We see in the U.K. and Belgium that customers become more sticky," or have greater allegiance to a service provider, he said. Acquiring customers is expensive for cable companies and retaining them is increasingly important.

While Liberty Global is a large player in the U.K., it "likely won't buy a mobile operator" there, he said. "We are a cable company and owning mobile assets would change our economics, our profile," he said.

In Belgium, however, Liberty Global recently acquired Base from Dutch carrier KPN. "In Belgium, especially in Flanders, we've been big enough and Base was small enough to absorb them easily," Mr. Fries said.

In most other markets it is more efficient to rent mobile capacity than to buy an operator, he said.

Mr. Fries said Liberty Global isn't vulnerable as a takeover target. "We are absolutely not vulnerable, in terms of becoming a target against our own will," he said. "We have great organic growth. There are no deals we need to do to be successful."

Write to Archibald Preuschat at [e-mail]

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