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

Hello, everyone, and thank you very much for joining us for our fireside chat with Liberty Global CEO, Mike Fries. Hi, Mike, how are you doing?

I'm doing great. How are you doing?

I'm good. Thanks. Thank you very much for joining us for this chat. Excited to have this conversation with you for the first time.

So there is quite a long list of topics that I'd like us to talk about today. Probably a good opener for us, Mike, would be to look back at the past and -- at the transformation that Liberty went through. There is a very nice and interesting slide in your Q2 release, which actually summarized the story quite nicely and the transformation over the past 5 years. So could you tell us where you are in terms of the transformation? You have concentrated the business in four FMC players. So if you can walk us through what -- the work that was done so far?

Yes, sure.

And also, talk about the next chapter of the transformation as well.

Yes, sure. Well, first of all, thanks for having me. I always enjoy this event. It's one of the best. You put your finger on it. We've had -- we've been pretty agile in the last 5 or 6 years, more agile than I think any of our peers. We decided 5, 6 years ago, we had to get smaller to get bigger. So we exited half our markets, exited 6 countries at very high multiples, as you know, double-digit EBITDA multiples usually. And we built these national fixed-mobile champions, really, in the best markets in Europe, we think. So we're sitting today with 85 million fixed in mobile subs, maybe $25 billion of aggregate revenue. So we're actually bigger today than when we started, but we have national scale, which matters, as you know, in our business, a tremendous amount. So we're #1 or 2 pretty much in every market and every product, which gives us the ability to shape those markets, deal with regulators, negotiate with the big streamers or the big tech companies and also create great strategic optionality. And I think this sector, as a whole, is riding some tailwinds here. You may or may not agree, but I think the demand for connectivity that the pandemic stimulated is going nowhere but up. We're finding that there's pricing power in our business again. Regulators are starting to favor our business versus challenge it and put us in a box. And we're -- and this hidden value of all these infrastructure assets is creating kind of golden opportunities for many of us. And the other thing that makes us obviously unique is we've got massive synergies, so -- yet to be realized, probably, well, over $12 billion. And if you just look at our share of that, it's probably $15 a share or something. And we've got a pretty good track record when it comes to synergies. And then as I -- why did we do all this? Well, look, you would know convergence works in Europe. It's critical. It reduces churn, it raises NPS, the cross-sell and up-sell opportunity is massive. And you can see it in our performance. Q3, we added 266,000 broadband and mobile subs. That's better than we did in -- sorry, Q3, better than Q2, so sequential improvement. And so the fixed-mobile businesses are all about driving scale, driving growth, taking market share and ultimately generating massive free cash flow. That's really what we're about. Now we have other value drivers, as you might have picked up on. Our ventures portfolio, which I'm sure we'll talk about, is now too big to ignore. We think it's -- we know it's valued over $3 billion, $5.50 a share. And our whole strategy around levered equity makes us really unique. Long-term fixed-rate debt with no near-term maturities, anchored by free cash flow growth, which was 35% this fiscal year. And if you look at the buybacks that we do on a free cash flow per share basis, over 40% growth in that free cash flow per share in 2021. You just don't see any of our peers managing their operations the way we manage our operations, dealing with the strategic and transformational opportunities the way we do. And more importantly, looking out for shareholders in terms of the way we manage our balance sheet and the way we do buybacks. So I think we're pretty unique in the European market, and we can talk about some of those things today, I'm sure.

Yes, absolutely. There are a number of exciting topics to discuss there. So if we look at the future going from here, what are the main priorities, top 3 priorities for Liberty Global?

Yes. Well, I think I'd just hit a few of them. Number one is to execute on these markets, right? Some of these transactions are relatively new. Obviously, the U.K. and Switzerland are not even 12 months in yet. So in 2 of these -- 2 of those markets, it's all about execution. Execution on synergies, execution on growth, execution on integration and execution on the fixed-mobile promise, so that is step one. Step two, look at where -- and we'll talk about this, I imagine, we're definitely looking very aggressively, and I think opportunistically, at the infrastructure opportunities that we have. And we've talked about that with our shareholders regularly, whether that's in the U.K. or whether that's in Ireland. We just announced we're going to build out fiber there throughout our footprint, whether it's Belgium, where you follow Telenet and the discussions we've had with Fluvius. So in every market, we are absolutely committed to making smart infrastructure choices that maintain our speed leadership but also create fundamental shareholder value. And then thirdly, it's just being focused on value creation, making sure we remain nimble and agile, and we're always focused principally on creating value. We're not empire builders. Empire builders don't sell half their markets and shrink the business. We're really value creators. And I think that distinguishes us from pretty much everybody in Europe as far as I could tell. And we're having fun doing it. So those are some of the priorities.

Make sense. Before taking into some of the operations, I wanted to chat about technology, in particular, as Europe is moving rapidly to fiber, including in some of your territories. It would be interesting to discuss the DOCSIS upgrade road map, in particular, DOCSIS 4. Will DOCSIS 4 be enough to compete against fiber? And will it be also quick enough to market?

Yes, yes. Great question. First of all, hybrid fiber/coax has a rich history, a rich history, full of innovation and progress. And there's a reason why we were the speed leader in every market today. Just 95% of our 30 million households in Europe are offering 1 gig. Call up right now, you can get 1 gig. I think the incumbents are maybe 15% to 40%, depending on the country. And we're offering speeds 2, 3, 4, 5x the incumbent. So what got us there? DOCSIS got us there. Will DOCSIS 4 work? Absolutely, it's going to work. There's a huge ecosystem of cable operators working with DOCSIS. And my personal view is it will be sooner than people believe, and cheaper, if history is any indication. Now having said that, we're still looking to overlay that last little bit of the network with fiber. Remember, HFC networks are fiber-rich and fiber-deep. It's not like a telco, where you're going from copper to fiber, which is like going from a bicycle to a car. We're just -- we are in the car, we're just making it slightly faster and doing that by extending fiber to the very last bit, whereas most of the network is already fiber. So I think we're in a golden position to, number one, already be a speed leader. Number two, have a really efficient path to 10 gig if we choose to do that. So -- but DOCSIS 4 is not going anywhere, meaning it's going to be real and it's going to work. That's -- I'm sure of that.

Right. And you have different options, right, depending on the markets. You see what makes sense. For instance, in the U.K., you're looking to overlay the network with FTTH in other markets with DOCSIS 4 heavy, et cetera. Could you walk us through the thinking process. How do you find the right path for each markets?

Yes. But it's not that complicated, so I'm happy to do that. First of all, you have to look at the market structure you're in, right? How competitive is the market in broadband? What is the status today of fiber overbuild? What's your share of the broadband market? And if you look at a place like Ireland, where it's somewhat competitive, there's quite a bit of fiber activity already, we can easily make the decision there because of our infrastructure to build that last little bit in fiber and be a competitive fiber-to-the-premise operator, and that's what we're going to do. You have to look at the economics of the build. So what's the density of the market? What access do you have to ducts or poles? So in the U.K., we can do fiber because for GBP 100 with 100% ducted network that we own, it's relatively inexpensive. So the economics matter a lot. And then I think it's also what sort of strategic opportunities are there in the market. Is there access to wholesale revenue? Is there a wholesale market? Not much of one in some markets. In other markets, kind of a robust one. Is there an opportunity to do a NetCo ServCo kind of model? Are partners available for financial or strategic purposes? So you have to look at all those factors. And I think the decision we'll make in each case will be a decision that drives long-term value in that market, and it will vary. It will vary. It won't be the same in every market because of what I just said. Market structures differ, the economics might differ, the network economics might differ and the strategic opportunities in each market are not the same. So trust us to make good decisions about that and along the lines of what I just outlined.

Makes sense. One topic, which at least has been quite important for the incumbents who have announced that they're moving from copper to fiber, that upgrade narrative has been always linked also to the legacy switch off and saying, hey, it's going to cost us this much CapEx, but also at some point, we'll have those operational efficiencies, et cetera. And I guess for cable, certainly, cable plants will also come with significant savings, in particular, on the energy side, isn't it?

No. No, you're not right. No, you're not right. Well, not the way we look at it. Let me correct my statement there. So for example, in the U.K., what makes this such a brilliant solution, I don't mean like we're brilliant but brilliant for economic and strategic reasons, is because we're fiber-deep already and because we have a fiber-rich network, and we're just adding fiber to that last little bit, and we're only going to do the drop and add the CPE to folks who want 10 gigabits, for example, or 5 gigabits, or whatever we can't do, we're going to have two networks running. So the vast majority of our customers will stay on HFC. We can do up to 2.5 gig on 3.1. And we're just now penetrating 1-gig speeds. So the vast majority of our customers will stay on that HFC network with the HFC CPE and a DOCSIS product. And then we're overlaying the fiber on that last mile, so to speak. And for those who want that fiber connection, no problem. We do the fiber drop, we do the fiber CPE. It's the best of both worlds. And so we will not ever shut that network down. I don't think you'll have -- you'll find any HFC operator doing it. And it's not a legacy network. It's a really fast, robust network that we're just making faster. So it's very different than the telcos. I really feel terrible for telcos because they do have these legacy networks that are dinosaurs and they need to put the dinosaurs in the ground and then have this new network. We're not the same at all. So it won't be that -- it won't be happening that way for us, and that's a good thing because the optionality we gain, the flexibility we gain for having both networks available far outweighs whatever benefits might accrue from shutting one down. So I hope that makes sense.

Right. Yes. So I guess no savings because it's not going to -- the cable plant is not going to be shut down. That's, I guess...

Correct. Correct.

But in some areas, for instance, in Belgium, my understanding is in areas where we'll have like a move to FTTH, then that is valid. Isn't that fair?

No. No. No. Well, listen, my understanding of the Fluvius deal is that we will build fiber. We will make Telenet network a fiber-to-the-premise network, yes. But the vast majority of that fiber-to-the-premise network already exists. And so the vast majority of that network will remain. And for someone who's loving 500-megabit speeds, why would you go in and change them -- change that out, do a drop and add a modem -- a new modem? They're perfectly happy. So I have to double-check there. Surely, in the U.K., we are not doing that. I would be highly surprised if John doesn't anticipate maintaining an HFC network underneath the fiber, so to speak, for as long as possible or until such time that there's nobody who wants 500 meg or 1 gig and they all want 10 gig. So it's the best of both worlds. Think about it that way. It's much more advantageous to have that flexibility than to sort of turn one off and turn the other one on. That's a bad day at the office. More CapEx, everybody needs new devices in the household, much tougher.

Interesting. Thank you, Mike. So digging into some of the operations. So starting with the U.K. The U.K. market seems to be really moving to a good direction from a pricing perspective. And we've seen BT introducing also recent and fresh price increases or at least planning to, which is particularly helpful for the markets. Could you talk about the pricing outlook in the U.K.?

Yes. Listen, I think historically, in the U.K., you have seen very fair and balanced pricing, a very healthy market from a customer point of view and I think from an operator point of view. Most operators have a CPI Plus approach to pricing. BT, of course, does. CPI Plus 4, which would be 8% or something like that. They're likely to do that. Many of the mobile operators, including O2 have a CPI Plus focused. Sky, and we are more discretionary, but largely in that zone. So Sky is using 5% to 6%. I think we were 4% across 80% of our footprint last year. We haven't announced pricing for the next year. But I think you can assume it's going to be healthy, that -- something that reflects both the value of the products, but also the cost that we're incurring to provide those products. So stay tuned. But I think the market overall is quite healthy. And that pricing power matters when you're looking at the macro aspects of our business. That, and the fact that the more customers we connect to 1 gig, the more customers we connect to fiber, the more customers BT connect to fiber, that's all -- that's good support for ARPUs because these are premium products. Nobody's giving them away. So that's a general trend, I think, is up.

Right. I would like to just remind the audience, please feel free to drop your questions in the Q&A box and I'll be more than happy to pass them on. Just staying in the U.K. The -- and there is a large spectrum of optionality for Virgin Media O2, ranging from wholesale, B2B, FMC. Could you talk about these different growth avenues for the new entity?

Sure. Listen, the opportunity at Virgin Media O2 starts with 3 things that are the most critical. Number one, great brands, okay? O2 is the largest mobile operator, but not just the largest. It's the most loved mobile operator. Highest NPS, lowest churn. It starts with great networks. Virgin, as I've said, has got 1 gig at the end of this year across half the country with speeds that are multiples of the incumbents and something like 45% market share on footprint. Pretty strong market share. And it starts with a great team. Lutz -- I mean, I've been in London all week, meeting with Lutz and the Telefonica folks, and he's doing a great job, not just integrating the business and driving the strategic growth initiatives, which are critical, but also keeping commercial momentum going, which is also critical, right? And all 4 revenue lines are growing. We had the best broadband growth in the market in the third quarter. I think we added twice as many subs as BT on half the footprint. I mean, just remind -- say that again, we added twice as many subs as BT Openreach on half the footprint. And so there's revenue tailwinds there. We've talked about pricing. We've talked about other things. We had strong postpaid ads in the market. We launched our first FMC offer called VOLT, which has turned out to be, so far, working brilliantly. And the B2B business is strong, as you know, a very important part of our synergies there, which are on track. We've got GBP 540 million of synergy -- run-rate synergies when we're done here. A big chunk of those will be accruing in the first 18 months. And then we think we're making all the right moves on the network. I'm sure we'll talk about that. Where we go from here in terms of upgrading the fiber, and we've had a pilot already underway to look at the cost of that. It's all working out great. So there's network. There's expansion, if you will, in our network. There's fortification of our networks. There's good fundamental underlying growth. There's synergies. There's a lot of good things going on. And I think we're in we're in great shape. The biggest question for a lot of people is why are you going to expand your network beyond the footprint you have? And we've been doing that every year with Project Lightning, which has been a massive success. We've added 2.5 million homes. We're getting 30% penetration rates, great IRRs. And we are looking at 7 million homes, maybe more. It's a big decision for us. But look at -- I don't have to tell you guys. The wholesale opportunity in the U.K. is ripe for the picking. If there's anybody on this call who thinks that BT Openreach isn't going to have competition for wholesale, that's just -- zero probability of that, zero probability of that. And they've got a lot of good things happening in BTM. It feels great. They're doing a lot of great stuff. There's not -- I don't think there was much news in what he had to say in the third quarter. But the idea that somehow they won't have significant competition in wholesale seems pretty foolish to me if anybody's banking on that, which I don't think they are. So a lot of positives in the U.K. market. I think it's just -- look, went through the budget today, really positive stuff across the board operationally, financially, strategically. So we're excited about this.

Right. And in terms of the time line for these opportunities, so you announced the upgrade of the existing footprint. So I guess, next steps will be the rest, the expansion, the wholesale opportunity. What is the time line for these opportunities to materialize?

We're not giving people a time line. But we're working pretty actively on figuring out our next moves in the infrastructure space. So I'm hesitant. I'm not going to give you a time line because then, everybody will be wondering when and how and why. So just trust us. Trust me when I tell you, it's top of the agenda for us, for Telefonica, for the management team. And there's no rush. I mean, other than the fact that people want to know, I appreciate that. There's no rush for us to make a decision or announcement. So -- but it's looking pretty interesting.

Right. That's fair. And staying in the U.K., looking at the different projects to roll out fiber from BT, from a number of also smaller players, et cetera, each player has an IRR sort of on a business case. For you guys, in particular, there is the footprint expansion that provides really good support. But if we step back, Mike, and we look at the whole market and the collective IRR of the market, if at some point, we'll end up having, the U.K. with 60 million FTTH lines for 28 million homes...

No, you won't.

It doesn't work for everyone. So is there room for corporation at some point?

Maybe. Look, it...

I'm talking about what is in the slides, the 60 million -- the slides...

I know exactly -- I'm not arguing with you. I'm not arguing with you. I'm chuckling because look, it -- there was a frenzy. There's a fiber frenzy in this market. It made some sense, right? There's access to cheap capital. BT was slow to the -- to take action on fiber. We were only half the market. So I could see it, but I will tell you, it's very different today. BT's much more aggressive on fiber. We're now 1 gig across our whole footprint. We weren't that way 2 years ago. We're now -- we've announced our own fiber plans. We're actually -- just talked about expanding those fiber plans. We built out Lightning. I think the window is slowly closing for many of these altnets. I don't mean to be a bearer of bad news, but their build costs are higher. It's very difficult to compete B2C in this market without a brand and without an operation. There's not enough wholesale customers to support the construction. And they only have a fraction of the funding they actually need. So we're going to see a lot of consolidation in this market and maybe some people just aren't going to make it. Will it be a 2-horse race? I don't know, two is enough in my book, and it is a 2-horse race, really, but I think you'll see consolidation, and that's okay. Market -- this is natural -- the way markets work. But as you point out, rightly, there's going to be a lot of people who don't make it. It's just not possible. And we do control our own destiny here, as does BT. We have the capital, we have the customers, we have the market share, we have the brands, we have the products, we have the FMC convergence. Yes, we have pretty much everything you need to make it happen. I just can't see the vast majority of these folks making it.

Right. To be followed.

Yes. Sure.

So then moving to Switzerland. The integration of UPC-Sunrise seems to be really -- to be going really well. You have upgraded the synergies target earlier this year as well. Could you talk about how the business has performed this year? And also discuss the market outlook. Have you seen any first signals of market repair so far? Are you optimistic in the future?

Yes. Listen, it's a competitive market. No question, but it's a 3-player market. So it's fundamentally rational, especially in the main brands. I mean, Swisscom has been aggressive of late with their discount brands. We have a discount brand. So the competition that's occurring in the discount brand area, I think, is not necessarily indicative of a broader market, which is relatively stable with high ARPUs, as you know. And we've had a great run. We've got pretty steady performance, 7 quarters of broadband growth. We're outpacing the market in broadband growth. Swisscom has been flat to down. We're the fastest-growing mobile operator there. I think we've added over half the net adds with great FMC penetration. And we just launched our first converged bundle, Sunrise We, which I think, took sales up 30% in October. So we're doing all the right things. And our financial results kind of reflect that. Now the financial results, you have to be careful because we have these costs to capture the synergies in there. If you net those out, our EBITDA was up 4%, but we'll always be showing, sharing with you where we are on those cost to capture. So you can understand what's underlying the core growth. And the synergies are ahead of schedule, as you kind of indicated. We raised our target by $50 million. So now we're looking at $325 million in synergies by the fifth year. It's almost $3.7 billion NPV. And most of those come in the first 3 years. So everything's looking really good. André and the team, I think, are super solid. Exciting product launches. Some really, I think, good strategic thinking on our network strategies there. Best 5G network. I mean, it's all coming together. So I'm pretty optimistic about the Swiss market.

Right. That's helpful. And moving to the Netherlands. The Dutch JV was a great FMC integration story, and it works. And that partnership with Vodafone worked quite well. What is the outlook for that partnership going from here?

Well, it's hard to say. Look, you're right, Vodafone's had a great run, especially when you compare them to KPN, right? Just year-to-date, Vodafone's had like positive revenue growth. I think KPN's been negative. We've had positive EBITDA growth. KPN's been flat. Our OFCF is positive. Their's been negative. So in almost every respect, we have a bigger, better consumer business than KPN, yet they trade at 8x and 6% free cash flow yield. Maybe you follow them, I don't know. So it's hard for me to understand how -- when they're getting handed, it's been difficult for them in that market how they trade where they do, but they do. Vodafone has been a great partner for us. They bring different skills. We're complementary in many ways. And there's really no big disagreements, but we have some big decisions to make in that market. What will our response to the fiber -- the threat of potential fiber overbuild or more of it be? How do we keep our mobile business competitive in a very competitive mobile market? We've lost some content rights, and we've got to make sure we're better at broadband retention. So we've got some big decisions to make. I have full confidence in the management team there. [ Arun ] and the team are fantastic. In Vodafone, I don't think it's top of their list of things to worry about. Maybe you follow Vodafone. They got a lot of things. Nick's got a lot of things on his plate. I don't think he wakes every morning thinking about Holland. We do. It's important to us. It's a big market and a big part of our growth story, and it's delivering $600 million of dividends to its shareholders this year, which is great. So I'm excited about the marketplace. And I think the partnership with them is terrific. And I have nothing to say about where it might go. I mean -- but it's a very good partnership. Nothing but positive things to say about them.

Right. Moving to Belgium. Telenet equity is having a hard time. How to solve that?

Yes. Look, I think the issue with Telenet, and I know you have an overweight on them, they're definitely undervalued, even though they traded a premium to us. And I think the issue is the market is waiting for information. They want to know more about the Fluvius deal. They want to know more, will the acquisition happen? What will the 5G rollout cost? What's the impact on free cash flow and dividend? So we're kind of at a perfect storm here for Telenet, meaning there's all these strategic things on the horizon and we're probably at a period of maximum information gap in the market. So the Fluvius deal, they got to flesh that out. I think it's a smart deal. I think it's an accretive deal. Right now, Fluvius is a complicated partner as it currently sits. And you can create a self-funding net code to go out there and it'll will have day 1 utilization of 70%. I would not want to be Proximus at this point or anyone who's invested in their fiber business because when this rolls out, we'll be -- Telenet will be able to grow its market share, protect its wholesale revenue with third-party capital and maybe even infrastructure type multiples, and they'll have 70% utilization. It's not out of room for -- you're talking about IRRs earlier. I don't know where the IRRs come from if this happens the way we think it will. And really, it's a wait -- a waiting game. But the fundamental story's solid. Eight consecutive quarters of broadband growth, good, stable revenue and EBITDA. Dividend is guarantee and fixed for the time being, and you've got towers that haven't been monetized. There's a lot of really positive things. But I do believe we're kind of in this information gap right now, which has got to -- you would probably know, it's got to -- got to kind of close that gap.

Right. And Telenet is looking as the network separation, and you have highlighted that NetCo setup is something that you could look at or at least evaluate for some markets.

Correct.

So could you expand on how the separation between networks and services that create value?

Well, it's market by market and situation by situation. But to put it simply, NetCos and ServCos are very different animals. The ServCo, if let's say, Telenet moves forward with Fluvius, as I expect to, the Telenet ServCo will be the same great Telenet ServCo, except that the economics will be slightly different, meaning it will be paying for access, not ownership economics on the access, but it'll have access to a better network and a more competitive network. And it will force Telenet, as it does every company, to be more innovative, more focused on products and services and pricing and all the great stuff that drives market share. And the ServCo will have a multiple on it. You'll put a multiple on that ServCo. Multiple of free cash flow, multiple of EBITDA, whatever you'll decide. The NetCo, on the other hand, will have more leverage. It'll be highly levered because it can support higher leverage. It'll have higher margins, and it'll have stable growth in revenue for quite some time, and is likely to attract a higher multiple than Telenet because it's -- you'll have infrastructure investors interested in investing, you'll have higher leverage, great free cash flow characteristics. So the NetCo itself probably will trade at a higher multiple. So when you put the two back together and you do some sum of the parts, ServCo will trade here, then their piece of the NetCo will trade, but worth this. We think when you put those things back together, as you'll do as an analyst, it's accretive to where the stock trades today and it creates optionality for the company. So that's how it works. Now is it simple to do? No. Stripping networks out of OpCo is not simple, nothing simple about it. But it does create options for financing, for partnership, for growth. And I think in the market that Telenet sits in today, it's a very accretive move and just need to get those terms sorted out and announced to people who know how to value it.

Interesting. I wanted to chat also about the venture portfolio, which is a key pillar for value -- the value creation for Liberty Global. Could you discuss what excites you the most the venture portfolio? Also, discuss the vision and the capital allocation strategy to this portfolio?

Well, listen, what excites me most is the success we're having. It's as I said, 3 for $1 billion fair market value today. And we mentioned this many times, but I'll just repeat it, 3 core pillars in that venture portfolio, tech, content and infrastructure with all of them having adjacencies to our core business. So we're not investing in businesses that are out of left field, as they say. We're investing in businesses where we can be a customer, where we can provide operating synergies or whatever, almost in every case. And I'm excited about the fact that I believe we're a very unique platform. We have a strong investment track record. We have incredible deal flow. Everybody wants to be -- have us involved in some of their deals. We've got synergies, as I said, between the venture assets and the OpCos. We have credibility and capital. And so to me, it's got a lot of tailwinds, the venture portfolio, and should be quite successful. We've had -- in the tech space, we've got multiple unicorns, Ploom, Lacework, a bunch of businesses that are just skyrocketing right now, usually cloud-based or games or things of that nature. In the content portfolio -- and I think the tech portfolio is largely self-funding today. It's already returned $400 million of capital. So with great IRR. So I think you can assume the tech portfolio is largely self-funding. The content portfolio, which is the biggest, since ITV in there, alternative media, Univision, Formula E., that -- some of those assets, we might even be harvesting or thinking about. We have a big stake in ITV. I don't what we're going to do. who knows? But it's -- we're up 50% on our investment. So it's all good. And I think in the infrastructure space, we're probably net investors. We've done some really interesting deals with Digital Bridge and a company called AtlasEdge, which is using our own properties across our OpCo footprint to start seeding the infrastructure for edge computing and edge data centers. And it's a super exciting stuff. And we're doing some fiber builds in Germany. We've got some electric charging opportunities using some of our own infrastructure. So there's a vibrant set of deals coming together and infrastructure, probably net investors that -- looking at the content portfolio more opportunistically, are we harvesting, or what and in tech? It's just on fire. I mean, really smart investments that are being made there that -- so it's good stuff. It's the best of what we do and who we are. I think it deserves attention from investors and shareholders.

Makes sense. I wanted also to chat about local listings, which is an option that you could evaluate. So 2 questions there. Firstly, about the time line, which assets do you think are ripe for potential listing? And also on how to narrow the value gap. When we look at where European telecom equities are trading, how comfortable are you that this would basically, potential listing could help narrow that -- So the time line and the gap.

Yes, yes. So we're -- good, good question. We're super focused on the value gap, right? And the net gap is most obvious when we sell an asset. I mean, we just sold Poland for 9x, and we traded 6 something. So the private market value of these businesses is massive. And you know that. You've looked at all the deals we've done. And so now -- but we're not going to sell everything to close the gap. We've already sold what we think we should sell. So that's part of it. The listings are an option. I mean, they're -- what do they do? They create transparency. They create maybe some liquidity, some strategic optionality. And if you look at the market, our peers trade at higher multiples than we do. Bottom line, I mean, the free cash flow yield of European telcos is mid-single digit. I think we're double digit right now, something like that. And that doesn't make sense. So if there's an appetite for a national champion, and the appetite is very vibrant in that local market, it's a good way to think about perhaps realizing value, creating optionality for our shareholders, et cetera. I think if we had to -- what's the first one? Who knows? I mean, Switzerland -- Sunrise was a great public company, and André was a great CEO of a public company. And that market was quite robust. And so when we would do that? TBD. But we'll look at it. Sometime next year, we'll be taking a serious look at that asset, whether it's ready given the timing of cash flow and synergies and what kind of dividend story can we tell. And are we -- how far along are we in the convergence. Other markets, we have IPO rights in Holland. We'll have IPO rights in 3 years from the U.K., who knows? But I think it's something we'll look at opportunistically. And it won't be great in every case. And some people say, well, Telenet doesn't trade well. Isn't that a bad omen? And I said not necessarily for all the reasons you and I just discussed. Telenet has some unique issues around it. And so I think it's market by market, and I think it could be quite accretive for investors. And no promises. We're just going to look at it as we should on an opportunistic basis.

Thank you, Mike. We have a number of questions from investors. Some we already discussed. Some, we didn't. So I'll go through some of them. Firstly, investor is asking to discuss labor and equipment shortage, in particular, in the U.K. So it says we hear there are labor and equipment shortages. What are you seeing in the U.K. operations on Project Lightning?

Yes. Well, there are some shortages, that's correct. But we feel like we have positioned ourselves next year, for sure, to achieve our Lightning goals. And we're likely to announce a bit more aggressive Lightning buildout, not the full $7 million that people are waiting to hear about, but just on the Lightning alone. Likely to be a bit more aggressive on that, and we believe we have the labor and the equipment that we need. I just met with the -- we all met with the Secretary of the DCMS and made it clear that supply chain issues are real. Labor is one of those issues we need to be sure we have access to in this market, post-Brexit and post pandemic. But for the foreseeable future, we feel pretty good about our ability, given our scale, the project we call Mustang, which is building fiber across our 16 million homes, that all the activities that we have going on means we will be an attractive partner for suppliers, both of equipment and of labor. So I think we're in a good spot. But it will be tight for others. No question about it.

Makes sense. Another question about Telenet and Vodafone Ziggo. Will you be willing to deploy more capital either in Belgium or the Netherlands?

Well, I'm not sure either of them need more capital since they both generate pretty good free cash flow. And in the case of Telenet, both Fluvius and Voo, I think, are self-funding, if they were to be successful in Voo, which, of course, nobody knows. And Fluvius is built to be a self-funding NetCo integrated company, so -- or integrated NetCo. So I'm not so sure we're going to need to put more money in those markets on an operational basis. If the opportunity presented itself to own more of those businesses, is probably the only way I would see us having to put more money in, perhaps. I think they're both great businesses. They're great markets. Essentially, rational markets, 3 players and then for -- on each. And I think they -- each are worthy of further investment if the opportunity presented itself. But on an operational basis, at least in what we're focused on today, they're pretty much cash flow positive, and they don't really require significant capital from investors.

Fantastic. So I'll leave it there, and I'll hand over to you, Mike, for any concluding remarks.

It's great to have this conversation. I wish we were in Barcelona, that would be nice. Maybe next year, we'll be back in Barcelona. It's always good to talk to you guys. And hopefully, I've been able to convince you to take that -- make that equal weight and overweight in this 45 minutes. That was my goal, but you'll let me know if I was successful. It's always great to talk to you. Yes. And yes, we feel really good about where we're going, and we appreciate the interest that people have and we're always open for conversations, so you know where to reach us.

Well, listen, thank you so much for the interesting conversation. It was insightful, so thank you very much for sharing your thoughts. And hopefully, next time, it will be in sunny Barcelona, who knows? Thank you, everyone, for listening.

Yes. We'll see you then. Take care.

Take care. Bye.

Bye.