Above: Wendy McDonald, Director of Communcations and Stakeholder Relations for Flow, manages the teleconference call announcing the acquisition of CWC. Photo by Mark Lyndersay.
BitDepth#1042 for May 24, 2016
On Monday last week, another seismic shift in the local telecommunications industry happened. In a quiet room at Flow’s Port of Spain office, yet another name was added to the list of owners of the once local cable company.
This time, Liberty Global, a multi-billion dollar cable and broadband company based in the US and UK and owned by John Malone, quite literally phoned in the takeover, announcing the closure of the deal on a regional teleconferencing call.
CEO Mark Freis made the announcement from Denver, Colorado and fielded five minutes worth of questions from media representatives from each of the major geographic markets that now fall under Liberty’s growing umbrella of cable and broadband coverage.
Liberty Global is the largest pay cable-TV and broadband provider in the world, reporting revenue of US$18.2 billion in 2014.
The company, which has a commanding presence in Europe, has been buying companies vigorously since 2013, spending US$24 billion on Virgin Media and taking a 58 per cent controlling interest in Belgium’s Telenet that year.
In 2014 it added Dutch cable provider Ziggo and in 2015 bought The TV3 Group, an Irish free-to-air TV network.
In November 2015, Liberty issued its prospectus for buying Cable & Wireless (CWC) and completed that deal today at a cost of US$7.4 billion, the enterprise value of the acquisition, scooping up the combined assets of Columbus, Flow, CWC and all the debt associated with the recent buyout deal.
They will add four million cable-TV subscribers and a fixed broadband service with two million subscribers to the 60 million they currently serve in European markets.
“Technology penetration compared to Europe suggests great opportunities,” Fries said.
Plans for Jamaica, for instance, will target the substantial parts of the country that are ready for significantly improved service.
“We understand this region very well. We have been investors for 20 years (Liberty offers service in Puerto Rico and Chile) and we are long-term investors.” “There may be uncertainties in some markets, but overall we see great growth potential in the region. There is tremendous demand among consumers for broadband data.”
“We are seeing that growth increasing by 50 percent every year. There is no other industry with that kind of growth potential”
“Broadband varies by market, some are advanced in terms of penetration and speed and we’d like to change that.”
“Our typical customer is receiving a 100mb connection, and the technology exists for us to do that here, over time. We are globalising at a rapid pace, and we are using the same technologies in all markets.”
One of those technologies is Liberty’s signature Horizon TV, a multi-platform media access service which separates access to the cable-TV service from a television and provides an experience that merges cloud-based Netflix-like access to archived films and series and Hulu-style mobile access to a live television lineup.
Will the market clout it has acquired in other markets offer an edge in encouraging legal feeds from content providers who have been hitherto uninterested in the small Caribbean market?
“We spend 2.5 billion on content from providers all around the world,” said Fries, “time will tell.”
The company was equally non-specific about its plans for the 49 per cent shareholding in TSTT it will inherit along with CWC, which has not been able to liquidate that investment to date, and the Telecommunications Authority may have some legitimate concerns about the time it’s taking to regularise that untidy situation.
“We have engaged all the relevant parties in making the sale of TSTT happen.” “We respect all the regulatory requirements. [But] selling the 49 per cent will require a buyer willing to buy, but not control the company.”
So will Flow’s headquarters need a new set of branding?
Apparently not. The Liberty CEO has no immediate plans to change existing branding (early conjecture about the impact of the deal is here).
“We expect things to be business as usual,” Fries said.Except for Phil Bentley, who is leaving the company. Columbus Communications president John Reid will manage the transition.
“We will be getting better acquainted and for the next few months you won’t see much change. We will look at each market independently and deploy the right solutions. It’s not one size fits all.”
Liberty is considering content and technology platforms to serve the hospitality industry in the region and in Barbados specifically.
“We are big believers in WiFi networks, we have six million hotspots in Europe and ensuring that access is pervasive and easy to use is a critical aspect of the business.”