Liberty Global Ltd. (LBTYA) Earnings Call Transcript & Summary

Okay. Good afternoon, everyone. This is the last European telco fireside chat we're having. And we're finishing off with Mike Fries, CEO and Vice Chairman of Liberty Global. Mike, thank you for attending, and we're really looking forward to hearing what you've got to say.

Great. Good to see you, Andrew.

Good to see you, too, and I'm sorry it's not in person. Just for the audience's sake, you know the drill. This is a fireside chat. We're going to go through big picture and operational questions. If you've got any burning questions I haven't asked or you want to ask, feel free to IB me or e-mail, but I think we're going to get through most of the most pertinent questions, if not all.

So Mike, without further ado, just over to you. A question that we've been asking and what we've been noting from other CEOs of leading European telcos is that COVID's put connectivity to the fore and maybe governments and regulators have taken notice there. As we start to head into a new, hopefully lighter phase of COVID, what opportunities excite you most as CEO of Liberty Global?

Sure. Well, listen, I've been in the business in Europe for something like 30 years, so I've seen probably all of the cycles. I'm sure I've seen all the cycles in that time frame. And I have to be honest, I can't recall feeling so many tailwinds as I feel right now. You'd expect me to say that, but let me expand on that. Number one, as you already kind of alluded to, demand for our products, mobile and broadband, has really never been higher. And it doesn't seem to be stopping. Certainly, we're not seeing any slowdown in that demand. Of course, consumption is up materially from COVID. But we're not just essential, we're actually finding that we're pretty popular, which is not traditionally how we felt in the past. We're much more attuned to customers. We've got higher NPS, lots of innovation happening. So on one hand, I think the demand curve looks great for our business and our industry. But secondly and maybe even more importantly, there's been a lot of market rationalization. I mean, you would be following this, Andrew, but last 10 to 15 years were tough for the telco sector. We benefit a bit as a challenger during that phase, but now that we're scale-based and much larger, we know what they were feeling. Firstly, mobile had the pressure from tariffs and roaming and hundreds of MVNOs and too much competition. And today, you're slowly seeing that competition rationalized from 4 to 3. Three of our biggest markets are all 3-player markets on the mobile side, and that's a really positive thing with growth coming in behind it. On the fixed side, you've seen a ton of fixed-mobile mergers. As you know, we've led the charge on that. We've done it in 10 countries either as seller/buyer or partner. And I think regulators are thrilled with that convergence because they know it's going to lead to more innovation and investment. And then the third thing I'd say is, slowly valuations seem to be reflecting some of this optimism perhaps. I mean, you know this better than I do. Stocks are up 15%, 20% in the last year. You look the previous 5 years, they were down 20%. And I think it's the factors I just described, plus operating performance is better obviously. And then maybe 2 other things, we're seeing pricing power. I mean, not to cite one of your competitors, but Credit Suisse put a piece out just the other day indicating that for the first time in many years, they're seeing more positive pricing moves than negative pricing moves in the mobile sector. So this concept of more for more looks to be kind of gaining some traction. And then the second thing I'd point out is that the value of infrastructure is undeniable. You can't ignore it anymore, whether it's towers at 25x or fiber deals getting done at 15x. So from my point of view, there's a lot of positive things happening here. And pardon me, I've got something coming in on my screen. And so from my point of view, a lot of positives. And you look at our stock specifically, I'd say there's 4 key things that get me excited. One is this FMC transformation that we've been going through here over the last several years. We've exited 6 markets at double-digit multiples. We've got these tremendous fixed-mobile scale-based players in 4 countries. We're actually bigger today than we were 5 years ago even though we're in half the countries. With 85 million fixed and mobile subs and $25 billion, I think we're the fifth largest telco in the whole space. And secondly, we've got the scale now to sort of shape our markets and shape our future. And then, of course, to grow from synergies. We've got $8 billion of unrealized synergies on an NPV basis. So that's going to provide some real momentum for us. And we still have this gap. You talk about it. Everybody talks about it. We just sold Poland at 9x. Really proud, by the way, of what we've achieved there, but just there was no real opportunity for us to become a fixed-mobile champion. I don't think anybody was even valuing Poland. They sure weren't valuing it at 9x. And so this gap, I think, is going to get closed as we continue to rationalize the portfolio, as we drive growth, particularly free cash flow, as we consider listings and things of that nature, as we continue to monetize infrastructure. I mean, we have indirect interest in towers that are $2 to $3 a share, and as we stay focused on shrinking our equity. So those are the things that give me confidence and excitement that I'm excited about. And I think the market context is pretty good for us right now.

Yes. I agree. There's quite a few things to delve into there. And we'll do that through the course of the questions. Just one thing, when you talked about the gap, what exactly do you mean by the gap?

Valuation gap. Sorry, I should have been clear. The valuation gap, the private-public valuation gap and the discount, whatever you want to describe it as in our stock.

Do you have a view as to what's driving that or what can rectify that apart from asset sales?

I think it's operating performance, number one, driving operating performance, continuing to show commercial momentum with the ultimate goal of free cash flow generation. It's realization of synergies that we put out in front of us now, an $8 billion NPV just to our shareholders that we've got to go out and achieve. I think it's going to be some continued market rationalization of assets at our core but also looking at ways of finding transparent value in assets that are core, whether that's through listings or other factors. I think the buyback, which we've announced and we'll talk about, this 10% of shares is a very strong signal. We're not saying, well, we'll do $1 billion and then maybe we won't, depending on how comfortable we are. We're going to buy 10% of the shares regardless of the price. And in our minds, that's a pretty confident statement about what we think we can achieve with our business today.

Yes. It'd be good to talk about that and then particularly private with regard to the infrastructure. Just lastly, just another thing that you mentioned, clearly, the more for more, the willingness to pay more for more, which we're seeing certainly from a telco perspective in certain markets more than others, but do you think that's a structural shift? Is it a onetime shift or something you'll continue to see in terms of your ability to guide customers up there?

Well, I think it comes from a few things. It comes from the massive investment we're making in fiber and 5G and 1-gig and all that good stuff. So the industry as a whole is putting tremendous amounts of capital to work for the benefit of consumers. Secondly, I think you're seeing regulators step off our necks a bit and allow us to charge reasonable prices. By the way, prices in Europe are a fraction of the U.S., reasonable prices for these high-quality innovative services. So these investments we're making, it's a need to get a return combined with regulators seeing that need for a return and consumers being happy with what they're getting. So there's a virtuous circle there that we've got to keep fueling with our investments.

Yes. Okay. So keen to move on to what is one of the biggest debates in the sector, certainly the biggest debate for cable operators. And it's something I was having a conversation, interesting that you say that, with a private investor today, which is the future of cable. Many investors we speak to are asking where and when fiber-to-the-home may be necessary. So it would be good to get your kind of big picture view on that. And then I'd like to ask you a few questions around the U.K. and elaborate on how you think about the payback from following your announcement that you're going to upgrade your U.K. network to fiber.

Sure. Well, I mean, the U.K. is maybe as good a place as any to start with that debate. First of all, in the U.K., when we looked at the evolution of our network, we concluded that because we have such a robust infrastructure there with underground ducting control by us, the actual cost of DOCSIS 4.0 versus fiber is pretty close. And from that point of view, there is some -- and now the U.K. is unique, as I just described, and so every market will be different. But we think it was the right move, and we think that the returns that we can look for from that investment are pretty near term and obvious, whether that's a more robust B2C offer with symmetrical services or 10-gig more quickly or whether that's B2B with greater enterprise opportunity and backhaul. So the base case, DOCSIS 4.0 versus fiber in the U.K. on our 14 million homes that are on already fiber there looks pretty good without wholesale, without any other juice, if you will, in the equation. And that's simply because in that market, we can do it reasonably inexpensively. Other markets, not necessarily. It's not an indictment on HFC here. I mean, every market will be different, depending on the infrastructure that we have and how deep our fiber is. And DOCSIS 4.0 is going to work. It's going to get us to 10-gig with low latency on an efficient basis. And the important thing about this message is, we're going to use both in this market. We're not replacing HFC. HFC will take us to 2.5-gig on what we've already invested. It's about what we'll do from 2.5 to 10. And so from that point of view, I think you have to look at this more holistically, if you will. It's not we're tossing out the HFC. We're actually building the last little bit, right, because we're fiber to about 500 homes. And it's from that node point to those 500 homes that we extend the fiber, but we'll still keep that broadband DOCSIS network alive. And that gives us the flexibility of only upgrading to fiber those who want fiber, and it's early days as we know. So I think we have the best of both worlds. Both technologies are important, and we'll use both based on the market situation.

Okay. Thank you. You mentioned the juice of wholesale. Just wondered if you could talk about the payback on that fiber investment. It sounds like it works, in your mind, on a stand-alone basis without wholesale, but how are you thinking about your ability to win a wholesale customer? And how important is that to the investment case?

Well, it's not necessary for the base case of what we call of sort of evolving our existing 16 million home footprint. It's not necessary. It would be accretive to that case, no question. But we were very careful and clear that we don't need to become a wholesale provider there. Having said that, as you know, something like half the broadband customers there are using someone else's network. And there's quite a bit of opportunity, I would imagine, I would say, for considering wholesale, especially as we make that investment, with partners or without partners, just as a wholesale provider or potentially with strategic and financial partners. So you should assume, and we said it many times, we're looking at all those options. But that's upside from what we've already announced. It's not built into the plan. And I think if we did do it, we'll be rational. There's a lot of opportunity and we're carefully evaluating that.

And are those partners, those discussions with partners happening already? And you may or may not want to answer that. And could those partners actually be the wholesale customers themselves? Could you co-invest with wholesale customers?

Well, yes and yes. I mean, our job is to keep moving the ball forward, and so yes and yes. But I think it's important to point out in the U.K. today because I know there's a lot of questions around the activity there. If it's a race, cable is the fastest car on the track today, no question, right? 2/3 of our 16 million homes are already 1-gig. By the end of the year, the entire footprint will be 1-gig. I think BT has maybe overbuilt us with fiber in 20% of our footprint, something like that. So it's not really a fair fight today. And if it's all about 1-gig, which it is for Boris Johnson and for us and for customers and it's still early days on 1-gig, maybe there's a few hundred thousand customers in the whole country. We're in the best position. So we will always have an advantage because we're already 100% 1-gig by the end of the year on our 16 million homes. We'll upgrade those to 10-gig over time with this fiber upgrade, and then we'll consider expanding that beyond our 16 million home footprint as and when it's appropriate.

That's clear. And just you mentioned the difference between the nuance of the U.K., which is the ducts you've got. Are there any other nuances or any other -- is there any more color you could give on Belgium, Netherlands and Switzerland and how you think about the upgrade cycle there?

Well, I'd say everyone is different. We'll talk about Belgium, I'm sure, which is, and John's in the midst of conversations with partners there about a possible upgrade. I think we're now evaluating options in Holland. But remember, we're already 1-gig across the Dutch footprint and we've got options there. And so I mean, it really is a conversation market-by-market. I mean, so let's do it as we go through those markets.

Yes. Let's go for that. And then just on the pace of rollout, so how quickly can you respond to BT's obviously fairly rapid rollout of fiber-to-the-home?

Well, as I just said, if it's a race, we're already in the lead here, right? So they're at 20%, we're at 100% 1-gig by the end of the year. And so when it comes to being the fastest in the market, we're there. As we upbuild to fiber, as we upgrade to fiber in that 14 million of 16 million homes that aren't fiber today, we'll evaluate the pace. I'm not going to tell you how quickly we're going because that's a secret. But it's all a function of supply and builders and contracts. And so I think our pace can ramp pretty quickly. We've been doing this quite a while, right? I mean, Lightning is a great success for us, and we've been building homes for 5 years. We know how to do this.

I was going to ask on Lightning. Is there any update on there and your plans within Lightning?

Well, we've built 2.5 million homes. Half of those are fiber homes. We've connected, what, 1.3 million RGUs, something like that, with getting sort of longer-term penetration rates of 30%. So Lightning has been a huge success for us and gives us confidence to look at maybe an additional 7 million homes, if we choose to do that. We will absolutely continue Lightning now, these 400,000 to 500,000 homes a year. We're getting cost per premise down, getting good ARPUs, good IRRs. And on the 7 million, well, when we're ready to announce that, we might do that. The benefits of expanding that footprint to say, 22 million, 23 million homes is now we have more coverage of fixed-mobile because we're national in mobile. There's great wholesale opportunities that expand if you've got a bigger reach, of course, B2B would benefit. So we'll be thoughtful. We're looking at the economics. We're looking at what kind of partners we would be able to deliver, what kind of financing options. It's all in the works, but Lightning as a base case, 400,000 to 500,000 homes a year, absolutely fantastic for us and has given us the confidence and the know-how to go out and consider perhaps more expansive growth.

Okay. You mentioned B2B there. So you can say, I mean, obviously, VMED and O2 you got together and almost assuming that you've done that. Quickly after that, we had the fiber upgrade. But I wonder if you could talk about any other strategic initiatives or updates on the other strategic initiatives within the combination and B2B is, I guess, one of them.

Sure. I was just in London last week. I'd just tell you, the team is energized, totally focused, super busy. I would say the #1 initiative now is delivering the integration, right? We've got GBP 540 million of annual synergies, an NPV of GBP 6.2 billion and 80% of that is CapEx and OpEx. So I think Lutz and the team are squarely focused on the integration. That's really critical delivering that. And then secondly, they're squarely focused on maintaining commercial momentum. I mean, we had a record July and August in fixed customer adds, just FYI. That's a function of low churn and market growth. I think we've got 50% market share in net adds on our footprint. And in mobile, you're seeing net adds recover as well because of the strong market position. So in terms of initiatives beyond that, it's a function. Clearly, we're focused on fixed-mobile convergence. That's the #1 thing for us, cross-selling fixed to mobile. Today, about 40% of our Virgin broadband customers happen to have or have an O2 mobile product. That's great. But 2/3 of the O2 customers on our footprint don't have a Virgin product. So the cross-sell is obvious. We've seen this playbook in Belgium and Holland. We're going to execute it. And on B2B, listen, we have a great position. I mean, we are very complementary. We really didn't compete with O2 in any way, shape or form. But together, we have quite a sizable and important position in the B2B space. So we think the addressable market is something like GBP 7 billion. And our ability to penetrate that market beyond our current market share, which is relatively small, is a function of focus, cross-selling and ultimately just attack. And I feel pretty positive about the B2B opportunity. It's maybe one of the more exciting opportunities we see from this merger and this combination.

Is that across the board in terms of size of potential corporate customers?

I think it's across the board. It's SOHO. It's wholesale. It's backhaul. It's the -- even the -- if you want to include the MVNO business that O2 has, I mean, the enterprise wholesale B2B space for this combined business is quite substantial, and that's before we do consider anything on wholesale itself, so fixed wholesale.

Okay. So just last question on the U.K. and then we'll move on to the other regions. Just think about ARPUs and how you kind of balance your thinking about ARPU trajectory with the potential to wholesale the network.

Yes. Well, look, I think today, the U.K. is a rational market. As we talked about more for more, I think most operators are trying to do that. And we're in a pretty good position with premium fixed and the most popular mobile. But I'll tell you also that one big source of, the best evidence of that rational market are price increases. We've taken price increases. Sky has taken price increases. BT has taken price increases this year on fixed, right? We were 4%. Sky was 6%. BT was CPI plus 3.9%. And you're seeing mobile guys taking price increases all around CPI plus 3.5%, 4%. So that's a pretty good health metric of rational behavior, I think. And listen, if you look at our long-range plans, I'm not going to show you, but if you did, you'd see in there that the pressure we might be feeling from Openreach reducing prices on copper and DSL, we think, is outweighed by the fact that they're not regulated on fiber. And so as the market goes to 1-gig, when the market goes to 1-gig, you're going to see an upward pressure on wholesale rates that might counterbalance the downward pressure from copper coming down. So net-net, we think it's actually a pretty positive story and we'll see how it unfolds.

Yes. Okay. So that's helpful. Moving on to Belgium. And we discussed the kind of fiber versus coax debate, and Belgium is one of the markets at the center of that debate. So I wonder if you could update on your thoughts with Belgium in mind on that.

Yes. Listen, I think Telenet today is a clear market leader. They're in a great position, right? They got strong converged offers, stable revenue, great cash flow, you know this, leading broadband provider. They got a wholesale deal with Orange already. So Telenet is in a pretty good position. I think their network utilization is like 60%. But they do have this long-standing partnership, which is becoming more clear to investors with Fluvius that really owns 30% of that HFC network. And those discussions have been ongoing about restructuring that relationship, and in the process, creating this Flanders-wide NetCo that maybe even involves other investors, financial or strategic beyond just Fluvius and Telenet and ultimately migrating HFC to fiber-to-the-home. It's a complicated set of negotiations. I'm sure John talks about it all time and he's hoping to provide an update in the third quarter. But net-net, it's a positive for Telenet. Why? Because if this comes together and they're able to create a NetCo, if you will, obviously, there will be valuation and financing benefits to that NetCo. But secondly, it will secure their position as a leading broadband provider but also allow them to retain and grow wholesale revenue because they're providing wholesale -- getting wholesale revenue from Orange, and that's a big source of cash flow for them today. And that'll create a really powerful and exciting infrastructure platform. So I'm interested in it. I would tell you that I don't think it's not technology-driven as such. I don't think Telenet sat back and said, we have to go to fiber. I think Fluvius and others in the market said, why don't we consider it? And the conditions have to be right for Telenet to consider that because they're a market leader today and DOCSIS 4.0 is right around the corner. And I'll bet you, John would say, on balance, I can make this thing sing for a long time with DOCSIS. But the opportunity is now around infrastructure, NetCos and these partners, and so he's taking advantage of it. And I think, again, one of your other competitors just came out with a new sum of the parts. I think it's accretive to the tune of like EUR 15 a share or something if it came together. So partially because of the reasons I just described.

Yes. Okay. Interesting. Well, I guess we'll watch this space and look for a Q3 update on that. You also mentioned mobile, and just wondering if you could talk about what you think the scope to actually build share is in mobile as a fourth entrant, a fourth player. I guess we've seen varied success in the past with these types of asset.

I mean, the fourth entrant in Belgium has been a conversation that comes and goes, as you know, for years now, driven mostly by politicians, not by market actors. But this new spectrum auction, which is supposed to happen in early '22 has definitely lit that flame again. And there is one player that's showed up to possibly bid on spectrum. I don't want to say it's not going to happen because I don't know. But I do know that the company, Citymesh that's been identified, doesn't have a lot of capital. This is a big bet. And there hasn't been a great track record of fourth entrants in a mature converged market like Belgium. Just go back and look at all the other attempts. So I would be surprised if anybody came in and made a big move and to become a fourth operator in Belgium. I'm not saying it won't happen. I would just be surprised. It would have to be somebody who has either a very, very, very long-term view of capital or doesn't like to make money because it won't be easy in a mature converged market, where, quite frankly, prices are low. I mean, MVNOs have struggled there because the prepaid market is difficult and postpaid prices are low and the market's really mature. So we'll see how it unfolds. I'm not concerned. If a fourth entrant got 5%, 10% share and had it come from the various 3 players, I mean, maybe that makes the government happy. I don't think it's going to move the needle much for the operators.

Yes. Okay. Maybe moving on Switzerland and an investment that has kind of transformed your operations which is Sunrise. Where do we go from here from this? What are the risks and what are the opportunities of that asset?

This is going to be one of the best deals we ever did. I'm really, really positive on this combination we put together here. I mean, obviously, we're the clear #2 in the market in a great, stable market, a rational really 3-player market. But right in front of us, we've got synergies, right? And I think we just, I know we just raised our synergy target by 15%. So what was a $3.1 billion NPV of synergies is now $3.7 billion. That's the kind of message you want to deliver after you close a deal. And the integration seems to be on pace, but we've also got good commercial momentum. I mean, good broadband growth, high fixed-mobile convergence ratios now. The mobile business is doing great in postpaid. And the B2B opportunity is great. I mean, we grew B2B revenue 6% in the second quarter. We've got a relatively low market share of around 20% but even lower in SOHO. So I like the opportunity in B2B. So it's about synergies, it's about commercial momentum, fixed-mobile convergence and cash conversion. So I think this is going to be a fantastic investment for us, and I'm really, really pumped about it. So I look forward to keeping everybody updated.

Another mention of B2B opportunities. Do you think the B2B customers have become more open to challengers? And do you think the road is clear of your ability to take share in B2B, not just in Switzerland but...

Nobody gives up B2B share voluntarily, but I will tell you, it's becoming easier for attackers like us because 5G and fiber and 10-gig and 1-gig, they're neutralizers, meaning we all show up with incredible services and opportunities for customers. And customers are more sophisticated today than they used to be and that lends itself to challengers like us. Our approach to B2B will be more, we think, anyway, more strategic. And we'll look at small acquisitions. We're going to bring together a much more, I think, appealing B2B opportunity for small and medium enterprises, for sure, SOHO, absolutely. And so to me, as I look out, it's one of the real drivers of growth here for us.

Okay. And you mentioned in your previous answer about, you felt that the Swiss market is broadly rational on a pricing level. What about the kind of CapEx level and the network competition? Obviously, Swisscom and Salt now kind of offer high speeds to 2/3 of the country. What does that mean for you and your ambition there?

Well, I would say in our case, we get the best of both worlds there. Remember, we're already 1-gig with HFC to about 75% of the market, and we have access to every home that Swisscom builds out in fiber. So we will never be at a disadvantage to any operator in the market. We have our own 1-gig network. We have access to Swisscom's network that Sunrise brought with them. So we've got lots of options going forward. And I think we're going to look at the right mix between DOCSIS 4.0, maybe some fiber build, maybe some wholesale. But remember, in that market, it's not just about speed, it's also about customer experience, it's about customer loyalty. It's about the quality of the service, building out a smart home. I mean, these are all big drivers for us in the broadband space beyond just speed. And I think when you, Swisscom is all about maintaining share, right? That's their MO. And they don't really want to mess up the back book. And Salt is all about stealing share, being slightly disruptive, but we're still growing through that attack, if you want to call it that, and they don't really -- they're not really yet a scale-based player. And so the 3 operators have kind of picked their shots. We've got good market segmentation there, good brands. We've even actually sniffed around a little bit to see whether investors are excited about what we're doing in Switzerland, a little pre-IPO roadshow just to kind of check out appetite. And a lot of appetite for a business like Sunrise UPC that's got growth, good cash conversion, great market position, doing a lot of strategic things. I don't know if we'll do it or when we'll do it. It will come down to valuation and timing and leverage. But if you look at how Swisscom trades, that would be a pretty appealing, at some moment, at some point in time, that would be a pretty appealing listing, I think, for Swiss institutions. So we'll see what happens.

Yes. Growth market, low tax, yes, there's definitely interest. Moving on to the Netherlands and VODZiggo. You've got no cable regulation there. You've got strong operating trends. How do you think about your ownership of that asset now? And I mentioned that Vodafone said yesterday that they're kind of open to offers or words to that regard. Do you just see it as a business to run for levered cash flow or how do you view that asset now?

Well, Nick has my number last time I looked. Look, it's been an unequivocal success, so both we and Vodafone have to be very happy with what's occurred, right? Synergies ahead of schedule, ahead of budget, FMC now approaching 50%. All the churn and NPS benefits are real. EBITDA growth mid-single digits the last few years. I think we've taken $2.7 billion out of the Dutch business since the JV, took $2.4 billion out -- took -- sorry, $3.7 billion. We took $2.4 billion out at close and $1.3 billion of dividends and debt repayments to us. So this has been a terrific investment for us on any measure. And the T-Mobile sale, which just occurred, does validate that this is a robust and rational market. I don't think Apax and Warburg would pay 8.5x, whatever the actual number is, for a mobile business. The read across to us is pretty good in terms of the value of that asset to us. But let's see. I mean, we're in a strategic review right now. I mean, in fact, today, the teams are in a strategic review. What do we do about fixed long term? How aggressive are we in 5G? How important is content in the market? What kind of cash conversion and free cash flow do we want to drive longer term? So those are all the right questions. And at some point, we'll sit down and talk to Vodafone. They're great partners. We've had nothing but a good relationship with them. And if there's an opportunity to look at something between the 2 of us and we're open-minded as we should be, as I'm sure they will be. So let's see what happens.

Okay. And I guess as a theme of this conversation but many conversations, does the market ascribe the right value to assets. And moving on to your venture portfolio. You've seen repeated markups there. Do you have any plans to more proactively highlight those assets to the market? And maybe secondly, how do you think about investment into that portfolio?

We do. We do think it merits continued exposure and transparency. A year ago, nobody really knew about it. Today, I don't know if it's in our stock at all, but we think it's plus $5 to $6 a share of value. There's really those 3 buckets, right? Tech, which is about 1/3 of that $3 billion, dozens of investments, a bunch of unicorns. They're all strategic. Content, which is the largest chunk of that, it's pretty liquid. You've got the ITV stake, things of that nature. And then infrastructure is more emerging for us. But these are important activities. Why? They're strategic. So look at Plume. Our investment in Plume has become a huge driver of our SmartWiFi services across Europe. Sometimes it gives us important strategic chips, right? Will the ITV chip be worth something? I don't know, but... And then we're generating cash. The tech portfolio alone has returned $400 million to us just because they're in these great deals that are -- and they're looking at them as 3- to 5- to 7-year time frames and they're paying out. So for us, it's what we do. We do it well. And will we look at doing more? I think so. Why wouldn't we? Like I said, we've got capital. We think we're good at this. It's utilizing our best expertise and our best assets. I think the tech teams earned the right to do more. I think the content, we'll be careful on content. But infra, we're excited about. We announced today a small deal, I'll emphasize a small deal in Germany. In the fiber space, we're really looking -- Germany is an interesting market. We know it well, of course. There's high broadband growth and penetration but very low fiber and 1-gig. So we're looking at potentially some small markets, and I want to emphasize small because it's tens of millions here. I know people at the first step, people are probably nervous about the announcement. But there are tons of markets that have no HFC, no fiber and no HFC 1-gig or no cable at all. So we're looking at markets that really are untapped territory where we can be first mover and looking at the investment in a very modular way. If this works, if that works, then we might do more with a very good partner. But again, the important point here is this is modular and small. We didn't want to make too big a deal with that because we want municipalities to think we're serious, and we are but we're going to take our time. We're talking. I think our first investment is like $15 million or $20 million. This is not like we're stepping in with massive commitments. But if it works out, if the costs prove out and the returns prove out, we might do more, but it's a kind of thing we should be looking at.

Yes. That's interesting. We actually heard from BT they're even talking to Drahi about rolling out, helping them roll out fiber as everyone is open to different ideas in terms of network rollout. A couple more questions from me and conscious of time. Poland and Ireland, could you discuss the kind of the remainder of your portfolio, your other assets and how you're thinking about those investment versus harvesting.

Well, Poland, we announced today. You saw that or announced yesterday, sorry. And that transaction, we're very proud of. I think it's a great outcome for shareholders, a great outcome for employees and a great outcome for Poland to put together, I think, the best, most entrepreneurial fixed broadband player with an up-and-coming mobile player that Iliad owns and controls. We're very happy with that deal, a 9x multiple in a market that was really fragmented where we didn't have scale and has been tough in other respects. So great outcome and I'm really proud of the team there, and I think it's going to be a great deal for the country. So should sail through regulatory. In Ireland, we're in the evaluation phase. We're trying to figure out. It's a small market. We don't have any immediate FMC opportunity, but we have strong broadband presence and strong scale. And so the questions we're looking at, and I'll also add that Ireland looks a lot like the U.K. when it comes to really efficient if we chose to do fiber upgrade because of the nature of our infrastructure there. So we're looking at options with do it alone, do it ourselves. Again, a small market, but stay tuned. I think between the next 3 to 6 months, there will be some things to talk about there that are highly accretive. It's about the same size as Poland. But I think has a bit more, it's a smaller market where we're bigger. So we're bigger in that country and we have more scale and more opportunities. So we'll see what comes out of it.

And we talked about investments, but obviously, there's a balance between that and shareholder returns. And I wonder if you could talk about how you thought about that balance and the rationale for buybacks versus M&A and further investments.

Well, they're not mutually exclusive. Anyone who's owned our stock for a while knows these are not mutually exclusive. We'd like to do both. And we look at relative IRRs. We keep our powder dry for both. If you look at -- and buybacks for us are not symbolic, right? I mean, in the last 5 years, I think we bought back $10 billion worth of stock and our market cap is only $15 billion. And we've just got this new announcement. So for us, it's not symbolic. We're not trying to drive the stock up tomorrow. We're trying to build long-term value. And we know a lot about our business and we think that this long-term commitment to buybacks makes sense. On the other hand, we'll look at deals on the M&A side when they make sense, like the Sunrise deal, which remember, all of our opcos are free cash flow positive so they're largely able to do their own M&A. Telenet doesn't need to come to us to buy Voo, for example, which would be a great transaction for them, whatever the price would be. They don't need to come to us for that. They have their own liquidity and cash. So I think the M&A and the buybacks will remain interesting and we'll always balance those things. But I think the buyback commitment is a certainty and I think gives investors predictability and some comfort that we're anchoring the valuation around what we think is very inexpensive, very cheap.

That's a great segue to the last question. So operationally, you seem in a good spot. Free cash flow generation seem in a good spot. But as we've discussed throughout this conversation, you've got a lot of valuable infrastructure. But there is this disconnect between public and private valuations. So what's your vision for Liberty over the next 3 to 5 years? You obviously think in the long term to kind of extract and maximize value.

Yes. I think it's all about value creation for us, of course, for customers and employees, but primarily for shareholders when it comes to value creation. Look, I think the last 5 years, we've really transformed the company. We've reduced the number of countries from 12 to 6, but we've gotten bigger and more scale-based and more influential and strategic with great synergy potential and growth. So that transformation didn't happen easily. It's been going on for a while, but we're exiting at high multiples and we're doubling down in markets where we think we're going to create real value. And I think our position today is really strong. We talked the European telecom sector, I believe, is trending up, and we think we're the best positioned in that sector given the markets we're in and the scale and synergies in front of us. We are fundamentally undervalued on any metric. You can choose your metric, but it's clear that whatever people are using, we're undervalued. How do I know that? Well, because we just sold Poland at 9x, for example. And the businesses we own today are far superior to that business. The venture portfolio will be more and more transparent, and I think, transformational for us over time. We're generating outsized returns in strategic deals that are really relying on our expertise. And there are, look, there are a lot of companies that you've talked to in your conference that are well positioned and have good fundamental organic growth behind them and are riding the tailwinds that we might hopefully see here in Europe. But there can't be many that are strategically agile as us. To sell half your business and double down and grow and make these kind of moves, that's not easy to do in some of our peer group stocks. And I think that's, to me, the real secret sauce that we'll do what it takes to build value. We're not building empires here. And our financial sort of levered equity model is the right model to create value in this particular environment. And so I think we're in a great spot. I'm really proud of my team. We've come through, obviously, COVID and this transformation really well. And whether it's VM-O2 or Sunrise UPC or Telenet, what they might do with Voo or Fluvius or VodafoneZiggo or Ireland, I'm really, really, each of these businesses are extraordinarily good businesses. And now we've got them sort of focused, and I think the opportunities going forward are terrific for us. I'm excited. I haven't been this excited in a long time.

Well, I think that's the perfect note to finish on, Mike. Thank you very, very much for your time. Really appreciate it. Really interesting.

Thanks for having us. Always good to be here.

It's our pleasure, and thanks to the audience for joining.

Take care.

Cheers.