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

Okay. Good afternoon, everyone, and good morning for any of those in -- joining us from the West Coast. This is the last fireside chat as part of our European Communacopia Virtual Conference that we've been doing over the last couple of days. And going out with a bang, meeting with Mike Fries from Liberty. Mike, thanks so much for your time today and for joining us.

Great to be here. Thanks for having me.

And everyone knows the format by now, but just in case anyone doesn't, we're going straight into Q&A. And if anyone -- it's my job to ask the questions you [indiscernible] but if anyone has any questions, they do want to ask that I haven't, please either put it via the quick Q&A function on Zoom or ping me [indiscernible]. Without further ado, Mike, as I said, thank you for joining us. And just wanted to launch in with a few big picture questions, of which there are quite a few facing you in the sector at the moment. Just want to start with asset valuations because over the past few years, you have spoken in this as part of this conference and others, and you've talked about the gap between public and private digital infrastructure multiples. How do you see that gap now? And has anything changed in how you believe you could act to bridge that gap?

Well, I mean, this is a gap that my predecessors talked about 50, 60 years ago. It's a gap that is very real, and there's countless examples, it's as old as time. If you just look at our own history, for example, just the deals that we've done, and you would be familiar with all of these, back even in the early 2000s and mid-2000s, we were selling assets at 9 and 10 times to PE firms. And then, of course, more recently, we sold almost $30 billion of assets to strategics at anywhere from 9 to 12x. Those are, of course, convergence deals with synergies but nonetheless, it demonstrated the value of the inherent infrastructure and customer base that we built over time. So in the future, I see it only -- personally, I see it becoming more interesting because while interest rates and other factors have to line up perfectly to be an ideal double-digit world for us in the private multiples our infrastructure assets are gold. I mean the things we're doing with fiber, in particular, we've already demonstrated that with sales of our tower portfolios most recently in Belgium at 25 times. So we're sitting on fantastically valuable infrastructure assets. We'll talk a little bit about how we're building those, growing those, investing in those. But I think it's real. Now timing is everything, of course, in terms of how the actual multiples move. But the gap is real. And there are several ways to bridge that gap, right? We have the number one, just execute on the core business plan, be sure that we're growing and doing all the things we need to drive free cash flow. Local listings is a way to do it. And of course, just M&A, all or a portion of our assets looking at those transactions. And we're going to be very opportunistic. There's a sense of urgency that I've been trying to communicate that I think is real. And so we look forward to bridging that gap soon.

And that's the old sense of urgency.

Yes. Yes.

You touched on a number of points there, so I wanted to dig into a couple. First of all, I guess, the first 2 questions will be on fiber and mobile, which for a company that has been historically cable, I think, tells us where you're moving. You announced a while ago, your plans for accelerated fiber rollout in both the U.K. and Belgium. So just wondered how you're finding the speed and cost of rollout in that execution versus your initial expectations?

Well, so far, so good. I mean take the U.K. first, as we've announced, we're upgrading our 16 million homes to fiber at a very reasonable cost. In fact, not much less than what it cost us to do -- sorry, not much more than it would cost us to do DOCSIS 4.0. And we're well on our way there and GBP 100 pounds a home is proving out. And then, of course, we're extending our network by 5 million to 7 million homes by building greenfield fiber territory between GBP 550 and GBP 650 a home. And we're largely on plan. I think we'll have 4 million fiber homes by the end of this year, both upgraded and extend expansion. We made an altnet acquisition. We'll probably talk about that. And Telenet is a slightly different model. They're actually talking about infrastructure. It's our very first NetCo, where we have lifted and shifted the entire HFC infrastructure into a new vehicle, we call it wire. That vehicle is going to upgrade the HFC to fiber and starts out light with a really strong utilization rate and a very exciting future. So it doesn't mean we're doing it everywhere the same way. We're doing it differently in many markets. But certainly, fiber makes a lot of sense in Europe. It doesn't make a lot of sense in the U.S., happy to answer any questions from U.S. investors who say, like, "Well, why isn't Comcast doing this?" Really good explanation for that cost to build, density, wholesale revenue opportunities, a ton of reasons why it makes more sense for us, and it's pretty exciting.

Yes. If we draw on those nuances, obviously, there are even nuances within our own -- within Europe, right? So you're rolling out faster in Belgium and the U.K. than you are in, say, Switzerland and the Netherlands. Do you think there any changing dynamic that would mean you need to accelerate the fiber rollout that you're obviously extending in Switzerland or Netherlands. But do you think there's any reason why you might need to accelerate that? And what are the differences between those markets and in Belgium?

The right question. So there's 3 things that we look at in the European market broadly and in our markets to determine what the best outcome is network wise. Number one is what's the competitive environment our broadband speeds through the roof, what are ARPUs, what are other people doing with their network? Secondly, what's the market structure, right? By that I mean is there a wholesale business, right? There are some markets where there really is no wholesale revenue. Nobody is reselling fiber from anybody else. And then lastly, what's the cost to build. That's just the straight-up economics of it. And in the U.K., it made sense, I already went through that. We have -- there's a vibrant wholesale market. We're using our own underground infrastructure, everything lines up. But in Switzerland and Holland, it's slightly different, right? In Switzerland, there's only 2 fixed networks today, ours and Swisscom's, but it's expensive. It's really expensive to build. And there's only one wholesale guide besides us. So it's really a tricky market to think about overbuilding yourself with fiber, maybe no reason to do it and we'll have access to the entire country with fiber, and we already reached 70% of the country with 1 gig. So that market is not too much. Holland, a little different. I mean, I think the issues in Holland are probably overblown that people are like, "Holland, what are you going to do in Holland, they're quite worried about Holland." What I'll tell you is this, there's 2 networks there. We reached the national footprint, so does KPN. We have roughly equal businesses in terms of the consumer side. They're building fiber, we've got DOCSIS 3.1. We're 1 gig everywhere and they're early fiber in half the country or something like that. So we're doing just fine today. And then there's only 2 regional builders. And the 2 regional builders are building defined areas. So to make it simple, in about 70% of the country is just going to be 2 networks, us and KPN, which is what you find everywhere in the world. So I think we have options there. We can talk about Holland later and we have options there. But I think for the time being, we're doing pretty good about DOCSIS 3.1 and DOCSIS 4, but we do have options. It's just, I think, a more rational market than it appears from the outside.

Yes. Okay. So nothing really has changed a year later from the last time we spoke at Communacopia in terms of like strategic, yes. And then on mobile, so again, you're more a mobile company than you were 5 years ago. What's -- the people are getting a bit more build up on the scope for mobile to start generating higher returns around consolidation. What's your perspective on the scope for consolidation to be approved and, therefore, actually drive market repair across your markets?

Well, look, I think it's real. Let me -- you've already mentioned that 50% of our revenue today is mobile, either from B2C or B2B, which is, as you point out, a pretty meaningful move from where we started out light, but I think the right move because I think the underlying growth case for mobile is as good as I've seen it in 30 years. You're seeing mobile service revenue grow from usage, price increases, postpaid volume. There's a lot of really positive things happening on that side. We're seeing the CapEx cycle get close to being over hopefully with 5G. Convergence is driving lower churn, B2B is exciting with mobile because we're looking at 5G and mobile private networks. There's a lot of positive cases around mobile. We're fortunate to be in markets that are largely 3-player markets, except for the U.K. And I think that deal between Vodafone and is probably going to get done, should be done. I mean there are some issues around spectrum consolidation, around how the network JVs that we have with them and they have with others that need to be sorted out and I would say, fortified. But for the most part, I think it's a positive thing. And there are fewer and fewer markets for mobile operators and quite frankly, maybe 2 is enough. But certainly, 3 seems to be a stable number where people can compete. There's vibrant MVNO activity, lots of resellers, lots of places to buy mobile. Everybody has a sub-brand. I mean it's really -- there's plenty of consumer choice and having 4 networks versus 3 networks, doesn't it make it any different for consumers, in my opinion.

Yes. Okay. And if we look, say, 10 years ago, lots of operators in a market that were consolidating, would lobby for remedies, et cetera, whereas this time around, people seem happy to let the market repair, how would you see your -- how you play the U.K. market from that perspective?

I think we're -- I have to be careful here. We're broadly supportive, but we do feel there are some things that need to be addressed, and we're in good dialogue with the players to address those.

Yes. Okay. Thank you. Another differentiating feature of Liberty is the levered equity model. And for years, you've been proponents of the levered equity model and typically 4 to 5x leverage range across assets and the commitment to shareholder returns have been supportive. We're seeing sharp rises in interest costs in the past 12 to 18 months. How do you think the levered equity model has responded to the stress tests the macro environment is throwing up.

Well, look, I'm going to start with the facts. We have a strong balance sheet today. We have no material maturities until I think 2028. We've got a lot of cash. We're generating free cash flow. So the truth is we're not really impacted by the current interest rate environment because all of our debt is fixed rate at about roughly 4%. And our credit spreads haven't moved that much. Of course, base rates have moved. Now if rates stay high for 4 to 5 years, of course, we're going to have to deal with higher rates in the refinancing market somewhere down the road, if everybody has different views of that. You can't have low inflation and high rates, so it doesn't work. So I think it's reasonable to assume that the rate environment improves over a 3- to 4-year time frame, ask your own economic experts about it. But I think more importantly, as I've mentioned earlier, as we look at things like local listings perhaps, we're going to have to be realistic about what kind of rate, what kind of leverage local investors in other markets might think is appropriate versus what U.S. investors might think. And in that instance, we may use IPO proceeds. We may find other ways, combinations, whatever it is to try to delever a bit if it makes sense. But we'll look at that on a case-by-case basis. The beauty of our balance sheet is it's siloed. So we don't have any parent company debt and no debt from 1 operation has anything to do with debt from a different operation. So we can look at leverage very differently on a case-by-case basis, and that's what we'll do.

And any areas in particular where you note that there's a demand for lower leverage at this point?

Well, I think you're an expert in capital markets. You could go market by market and look at our peer group, anybody, KPN and Swisscom trading at 8x. They have a little lower leverage. I don't think it's a leverage it's driving 8x, but it doesn't hurt. So we'll try to optimize multiples and leverage where -- on a market-by-market base.

Okay. And so part and parcel of that is also the buyback program. Can you just give us an update on that program? And also kind of how you're thinking about it, obviously, the 2023 buyback flow of 15% was well received. How do you think about that going forward?

Well, look, I mean, we continue to believe that buying back stock is the best way to return capital to shareholders over the long run. It might -- people might wonder year-over-year, like what's it doing, but if you're thinking about it long term, it is the right way to do it. By the end of this year, we will have retired almost 60% of our shares since 2017. And this year, we've -- of course we've guided to 10%. We hit that in August. We said we'll increase it to a minimum 15%. There's a chance we buy more than that. We'll see, probably somewhere between 15% and 20%. And look, I think at the end of the day, several things will drive our stock, right? It will be an increase in broad market multiples perhaps. You'll come out and say, hey, it should trade at 6.5%. Well, 1 turn is $14 a share on our stock, 1 multiple turn. Or we'll see a closing gap -- closing that gap through local listings or exits or other things. And so we think buying back stock 18% to 20% is really going to materially improve that return for all of us when those things start to click. And that's why we do it. I think for us, it makes sense, and we'll continue to do it.

Okay. Thanks, Mike. I was going to start to just delve into some of the market-specific questions now and start with the U.K. and given the news flow from last week. We have lots of questions around altnet, but maybe we can start around the acquisition of Upp and justification of the acquisition by VMO2 and nexfibre of Upp.

Sure. So we announced the deal, I guess, just last week, our very first altnet acquisition, there have been, I think, 3 in the market. This is the first one we were successful with. The operator needed to sell, we think, the price we paid, while we didn't disclose it, it was roughly half of what they invested themselves. And we'll have to do some remediation and we'll have to spend some money to deliver it back to nexfibre in ready form and shape. And of course, it's in the east of England, where we are focused anyway on fiber extension. So it works great for us to add 175,000 homes. It accelerates nexfibre's greenfield fiber plans. And look, for us, the key things that matter are where is it? If you're overbuilding us, you're not going to get paid, certainly not like that. If you haven't overbuilt us, we're going to look at it very differently, of course. So I think to some extent, the location, the geography of the altnet matters a lot. The quality of the network, do they have any retail customers, any wholesale customers? The altnet market in the U.K. is challenged. I mean I'm going to say what everybody has said 100 times, so it's not new information. But at the same time, the market is still pretty vibrant and some people will stick it out. I think market rationalization is inevitable and we intend to be part of that. It was nice to get one done.

And when you're looking at that, how are you weighing Upp? You mentioned it was half the price of what they spent to build out, how are you weighing that -- Upp versus your build economics?

Well, basically, the buy build needs to be darn close. So what we have to do is spend some money on the build to remediate and upgrade. So -- but this might even be a little better than our build cost, but it needs to be close, right? We have to be able to say, not only is it accelerating time frame to build, but also approximates the cost we would incur ourselves to build. So you should assume that that's the way we looked at it.

Where -- can you just remind us where those costs are -- the build costs? Because one of the things that's potentially squeezing the altnet is clearly debt financing, but another element is the cost of build itself, labor costs. How is that impacting you guys?

Well, we're more or less delivering because we're doing things at such scale, just like BT would be doing, we are obviously able to get contractors, suppliers, construction firms at pretty good rates because we're offering them a long-term, multiyear millions of homes, and we were upgrading 16 million. We're building 5 million to 7 million. Those are big numbers. So our ability to promise, if you will, large-scale construction projects allows us, I think, an advantage to securing resources to get it done. And the costs are principally in the digging, of course, in the trenching, the equipment itself is a part of it, but that's -- everybody's paying more or less the same for that. And so I think that's a big difference we have in that market, along with BT.

Yes. A cost advantage to build out. And then you mentioned BT. BT continues to roll out pretty quickly. They've been shifting a bit of their spend towards actually provisioning customers with the product itself. How a year, 1.5 years later after you deciding to really go -- [upgrade] fiber, maybe it's 2 years. How do you see the market evolution in terms of BT's rollout and the challenges the U.K. outlets are facing versus what you anticipated at the time of your decision to accelerate fiber -- fiberoptics...

I'd say a couple of things. First of all, the upgrade of fiber of DOCSIS 3.1 to fiber for us was not built on any wholesale revenue. We figured over time, we're always increasing speeds or 1 gigabit now across 16 million homes. We want to be 5 gigabit, 10 gigabit. So just as we did with DOCSIS 4. We evaluate upgrade models, and this was the best one for us. It certainly has some defensive elements to it, to be sure we have fiber, if you want it but also some offensive elements that should we choose to roll out wholesale revenue or offer it to Sky or other people, then we'll do that. So that, to me, is a long -- a lot has to play out first, right? I mean we're all still very much in the process of creating it. But it feels to me like a 2-horse race. And that's not a bad thing, regulators are very pleased with the fact that someone like us is investing GBP 4.5 billion of equity and debt capital together with partners in a greenfield build as well as upgrading our own 16 million homes, which took decades building to fiber. It's a really positive moment for the U.K. And I think over time, the U.K. was quite clear about this fair bet concept, which you know well. You guys invest in infrastructure, and we'll protect the market in the sense that ensuring you can get a return. They've lost a little bit of control of that, I think, with the massive altnet activity, but this is sometimes a natural course of things, and you just have to be prepared to be opportunistic when things evolve, so.

And any change to the wholesale -- your approach to wholesaling, you mentioned that you haven't.

Well, the nexfibre JV with us, Telefonica and [InfraVia] is 100% based on wholesaling of which Virgin Media O2 is the principal anchor tenant. So all those brand-new homes, the very first customer knocking on those doors will be Virgin Media O2. And we've shown over the years that we can get 25%, 30% penetration very easily. So that anchors that nexfibre JV and if we can get others to join us, that would be awesome.

And talking of anchoring, I think, this improved market structure and the deregulation of BT's receiving in terms of fiber appears to be supporting if we just look at now at the market today. It looks like it's supporting price rises. And you stated clear expectations that the majority of the benefit of price rises of VMO2 to be delivered in the second half. Can you just give us an update on how those price rise benefits are materializing?

Well, I mean, I think it's -- we've been somewhat transparent about it and others have as well. Fixed prices are harder than mobile price increases because in our mobile base, we have these contracts that basically deliver those price increases without [writing down of] the contracts. In fixed, for the final year now because going forward, we won't have this in fixed, you've got a 30-day right to cancel and some people take advantage of it. So generally, we deliver about 50% of the fixed price rise and somewhere like 70%, 80% of the mobile price rise. So far so good. I mean, I have to say that without getting specific, we anticipate a certain amount of churn, a certain amount of price promotion and discounting and more or less, we're on budget in terms of what we're seeing. Now we did -- we had -- we lost 15,000 broadband subs in the second quarter that seemed to get people pretty nervous on a base of 5.7 million, I'm not sure why. But remember, we had announced those price increases, but we hadn't yet delivered any revenue benefit because we haven't rolled them out in terms of actually collecting more revenue. So maybe there's a little disconnect between subs and revenue. But so far, churn is normalized. It feels like we're headed down the path, we hope to be heading down.

Okay. And churn stabilized or stays normalized for the rest of the calendar year?

Well, I hope, I am not giving a guidance on that, no, yes.

Yes. Okay. And so if we think about -- we've got inflation indexing in parts of the U.K. now, and that's become a bit of a focus for U.K. politicians in terms of the magnitude of the price rises but on the flip side, investors need to see a return being made on the investments that you guys are making. Could you just talk about your thinking on that, how you balance the different stakeholders in terms of your ability to actually raise prices?

Yes. Certainly, I understand the frustration that regulators have in an inflationary environment, consumers are struggling. They're feeling this cost of living pinch, more from energy than anything else. But I think you have to put that into perspective. Consumers spend 2% to 3% of their disposable income on our telco services, 2% to 3%. And our prices are already pretty reasonable, especially compared to the U.S., much lower than the U.S. So the actual it sounds big, 10%, 12% is actually a small number on a -- in terms of pounds on a monthly basis. So and as you said, we're investing billions , all of us, billions in fiber and 5G. And this fair bit concept, I think, is one that has to be respected as well. So ensuring -- so what we've done as an industry is to ensure that consumers who are in need, are taken care of. We have a databank and [VMO2] that gives people access to data on their mobile -- in mobile services. So we're taking care of those who really, really need help for sure. But I think we're also trying to find that fine balance where we can generate reasonable return and we'd all like it to be higher, trust me, and also making these large investments. And so I think it's been well managed. And I respect Ofcom's job and we're there to support them with analysis and everything we could support them with. I don't see any need for action. I don't think there will be, but I think we have to keep informing and make sure everybody understands what's happening.

As you mentioned, it's becoming a 2-horse race in terms of the infrastructure in the U.K., but obviously, the retail environment remains pretty competitive in terms of the number of players at least. Could you just talk through what you're seeing in terms of competitive activity in fixed and competitive activity in mobile, certainly over the summer and could give us an update on that, please?

Yes. I mean I think there's been a bit of improvement, not a lot. Fixed is seeing some price rise or front book activity that's somewhat positive. Average prices are up a bit. Some people are being aggressive at the lower end. TalkTalk, I think, has stopped marketing. So that's certainly impacted pricing a bit at the lower end. Mobile is more mixed. We're seeing -- we have a lot of MVNOs in the U.K. market, and they're going to be aggressive where they need to be. A lot of sub-brands can be aggressive. But you are seeing the more fulsome operators like ourselves who are offering unlimited packages and broader bundles, protect pricing, if not take prices up a little bit on the front book. So I'd say it's mixed, but that's always the answer, isn't it? I mean, it's never a singular trend in 1 product or another. It's always ebbing and flowing.

Certainly on the retail side yes, exactly. And maybe use that as a segue for Netherlands. Just wanted to talk, first of all, in terms of your midterm strategy. I mean, your Dutch operations, they have delivered strong growth and strong free cash flow for a number of years. How are you thinking -- you've also alluded to it earlier on in the conversation, but how are you thinking about kind of 2- to 3-year strategy in the Dutch business, given consumer trends recently have been more mixed and free cash flow headwinds look like they're beginning to build a little.

Well, I always feel compelled to remind people that this -- when the case studies are written about fixed mobile convergence, Vodafone Ziggo will be in there. It is a textbook case of convergence, right? We hit synergies above budget, ahead of schedule. Half of our broadband [indiscernible] or mobile product today. EBITDA and free cash flow growth has been solid. We just -- Liberty has taken EUR 4.5 billion out of the business since the merger. So -- it's done great. And the market is more rational than I think people realize. I mentioned, you've got 2 large players, us and KPN. We're largely the same size in consumer and then the smaller operators who are more regional. So it's a pretty rational market. And Vodafone is a great partner. So clearly, we're thinking about now, you wouldn't be surprised that we are talking, I'd say, more frequently and more effectively at the CEO level and elsewhere. That's where we're going and what we're going to do. And I think there's a handful of options in the playbook. I'm not going to lay them out for you here. You could probably think through them yourself. And you should assume all of those options are on the table. And -- but meanwhile, the business -- it's got a great management team. It's got a solid, sound position as essentially the same size as KPN and consumers. And I think it's got lots of optionality. So that's all you can hope for. You've got a sound business, great team and lots of optionality with scale. And unfortunately, a shareholder like us and Vodafone, who are open to being opportunistic about what it looks like to crystallize or capture value in that business.

I was going to ask about specific ways to crystallize, but I wouldn't push that. But in terms of time line, any sense of time line or again opportunistic...

Not really. I mean -- no, I don't want to talk about that. That's never a good thing, yes.

In terms of market share, and I guess the fundamental question that everyone asks and I think the consensus has been that cable is inferior to fiber. But actually, there are some that disagree. And what we see in the Netherlands is where KPN is building fiber, it also seems to be gaining market share. How confident are you in cable and the route to DOCSIS 4.0 that, that can really stay competitive versus the incumbent and incumbent fiber rollout. Talking specifically about Netherlands but broadly.

Yes. What we're finding in the Netherlands is, again, broadly, fiber is not what's driving share shift. We're 1 gig everywhere, their fiber half their market. I mean, so we're not even competing with them with fiber in some part of that market. So it's really about price and about service quality. And those are 2 things any network operator can do better without worrying too much about what kind of cable they're pulling through the duct. So we are finding that we can win back for sure. But it's a competitive market. And so you have to find a way to differentiate yourself just with convergence because everybody is doing that now. But with quality of your service, the quality of your customer experience, content, where it makes sense, [indiscernible] is a mainstay in that market. So we have to just keep fighting it out. But I think the market is more rational than it appears from the outside. And I think KPN is largely a competitive player. They do some irrational things. You can talk to them about that when you have your next analyst call that's unclear to us why they lower the book price when they're raising back book prices. These things don't make any sense to us folks but in the scheme of things, we're always kind of -- it's a punching match, and we're taking some, there taking some and if you look at over the long run, it seems pretty balanced.

Okay. So I mean if we -- unfortunately, we met KPN last week. So we will meet them again shortly, I'm sure, and they've got their Capital Markets Day in November. But one thing that's clear in the Dutch market, there's been some pretty big price indexation there as well, right? And we just saw recently, you put through some pretty big mobile price rises and you put through bigger index -- broadband price rises than KPN did. Could you just give us an update on how -- those are pretty early days on the mobile side, but how those kind of price -- that price indexation is playing out? And maybe if you could just bring in -- KPN noted that there's been some promotional activity from Vodafone Ziggo in September in terms of half price promotions just how that plays into the price index?

Well, maybe, but we brought it for 12 months. We're not doing 24-month promotions. They were not kind of getting the tit for tat. But our price increases were 8% on fixed and 10% on mobile, but they were based on inflation. KPN came in at 6.5%, which is lower, obviously, and later, they normally. So they got to ride a period where our price increases were out there, and they were sort of riding that wave of goodness and then they raised their own prices but not quite as high. I have not -- so far, so good. I mean, it's a tough broadband business. It's a tough mobile business, and each of us are doing our best to retain customers and take share. So far, I think, all of our price increases have landed where we thought they would, and we're hoping for more rational behavior.

Conscious of time, going to shift on to Switzerland. And the broad question is just the state of competition. And if we talk specifically Salt announced its price rise earlier in the year after that initial termination right of your customers have passed, it was able to benefit from higher churn on your customer base as a result. But have you seen that effect reversing out? And how would you characterize kind of the competitive landscape there at the moment?

Well, I mean the price rise, we talked a lot about that on our second quarter call. It was the first one we've done in a very long time, maybe ever that I can remember, not a very long time. And then of course, Salt followed and then Swisscom will follow because it changed their contracts as we all know to make that -- build that escalator in. I don't know what the percent -- 25%, 30% of our subs have the right to bail out in extraordinary writing. So we saw some churn in the second quarter, which we expected to see. I'd say churn in July in the third quarter so far is right where we wanted it. There's been a little less inflow, a little less flux in the market. So volumes at inbound, if you will, gross adds have probably been impacted more than churn. And that's maybe the entire market, we'll find out. But certainly, we're seeing a little bit of that. But it is the ultimate rational market. I mean Swisscom is the ultimate [incumbent], right? They're not trying to shape, take the tree too hard. They want to stay right around 60% and Salt is really subscale. So we have a great niche, Sunrise is a premium brand, incredible support, marketing support, branding support. And ARPUs in that market are 2x what they are almost any of the country we're in. So it's a good place to be, and we'll see how this third quarter shapes up.

And Belgium, you obviously had a delisting recently. Can you talk through the strategic rationale behind that and where you see the opportunities to really expand value there?

Yes. Listen, I mean, people will scratch their heads. They will say you're talking about listings, and now you're taking listing private. But you have to remember, when Telenet went public like, I don't know, 18 years ago, and it had a great run. It traded well, well above our premium our multiple. We had a premium multiple for many, many, many years, not really until recently. When I think people saw fiber and new market entrants and fatigue. So we said, fine, we will roll it in. And as I said, it's an attractive structure. We're not using any of our own cash to do it. We use balance sheet basically on the target. We brought in 93% in the first round and the second round closes tomorrow. So we'll see how it goes. We're excited about where they're going. I mean as I said, it's the most advanced operating model we have with the NetCo to build out 75% of the country of the Flanders and some parts of Brussels and Wallonia and a great sort of anchor tenant in Telenet and now with Belgium joining. So it has some real interesting infrastructure elements to it with this NetCo that's ready-made but it will have some risk. It's a mature market. We're the high-price provider. We have the new entrant mobile. So I understand why people would exit and understand what an operator and invest like us would enter for the balance of it anyway at these kinds of multiples. The core business is strong. And I think it has -- it's going to be an interesting 2 or 3 years' time frame here, but we think sort of owned and operated by us is going to probably be able to make decisions more quickly and have more freedom to get it to this next level, which is exciting.

Understood. Just shifting gears briefly into the ventures portfolio. You said at the first quarter that, that can turn cash positive -- cash flow positive within the next 24 months. Which of the kind of 4 buckets are you most excited about in terms of opportunities there?

Well, a lot of people scratch their head and hey, why are you doing this? And I always feel the need to say, well, look, the whole company was built on a ventures model. Early days when we didn't have a lot of capital, we were making investments in minority positions and growing and building and exiting. So it's kind of in our DNA. And if you look at the 3 buckets, tech has been a certifiable success, right? We're investing in cyber and cyber security and enterprise and cloud-based stuff that we can be a customer of. We've got -- I think we invested a total of EUR 650 million over the last 8 years. We've returned EUR 550 million, so we're net in EUR 100 million, and we value the portfolio at EUR 800 million. So going right. And I think we're making smart investments with smart companies and smart partners and we're making money doing it. So that's a positive. Media content, a little different. That's a 15 assets plus/minus legacy, a lot of them. And so we're in sort of, I would say, work out, but sort of let's work around these businesses, what do we need to own? What don't we need to own. And you'll see us as we've talked about, do some things there. And then infrastructure is exciting to me, infrastructure is, again, something we're good at, whether it's edge data centers or some of the towers we own inside the opcos, these are high-growth assets. And I think we can make choices and put capital to work. We understand balance sheets and treasury much better than our peers. And I think we should be able to find segments, not everything, but segments where we can create multiple billion dollar assets, if not more. And I love our business, our core business, and I think we have a great opportunity to create value, of course, but we're in a very low growth environment generally speaking in telco. These are -- we're investing in things, say in infrastructure with massive tailwinds. So it's good to have that diversity, and we're going to find ways to optimize how we talk about fund, finance and hopefully crystalize value in that stuff.

It's a great segue because I'm just going to come to the final question is going to come back to where we started in terms of value crystallization. And just talk about your redomiciling of Bermuda. Hopefully reduces complexity in terms of administration and facilitates future shareholder value creation. Can you talk us through the key strategic considerations here and how that discussion could vary from market to market because that could be an opportunity that's broader across the rest of your group?

Yes. Maybe I'll bring it back even a step higher. It feels to us like this is a really good time to lean into our stock. I mean, I would say that, but I believe it, right? I mean we have spent the last 5 years preparing for this moment. right? We simplified our portfolio. We exited at great multiples. We sold off subscale businesses. We spun off Latin America. We bought back 60% of the stock. We've been preparing for this moment where we're in 5 core markets. We think the best markets, the most rational markets, where we're the primary challenger. We have great management teams and a lot of synergies in that core business in terms of tailwinds. I'm sorry, in terms of things like synergies and writing the broadband consumption curve and we've talked about mobile and B2B. So we've got these great assets in these -- what we think are the best markets. And we've got now, I think, a platform having got an overwhelming support to become a Bermuda company to really do creative things in terms of how we monetize. And I don't want to get too much detail because I'm sure people will say, well, you promised or you said at Goldman, and I just want to be more general at this point. But I think it's going to create some real opportunity for us in terms of how we do all the things I've been talking about, which is really shrink the gap. That is the goal, is to shrink the gap, right, to crystallize, to monetize, for the benefit of shareholders and to do that through multiple corporate and financial means, all of which are going to be easier to execute in the structure we're heading to, I think, as of November was when it actually happened. So it's a good -- I mean, I moved to London, not necessarily just to have fun because the weather is terrible, but there's a sense of urgency among all of us that this is going to be a pretty important 2 to 3 years for us and that we are unlike some of our peers who have perhaps more sort of national importance, let's say. Or some of our peers who are too big to maneuver or some of our peers who are really empire builders, we are the free radical. We're the one that owns we think, the best assets of all of them, and we're open to waste -- to multiple ways to grow, of course, first and foremost, but also to create value with those businesses. And so it's an exciting time for us.

Yes. And I think that's an exciting point at which to finish the day. We're seeing some -- we're on the precipice, we think of public sector interest, public equity interest in the sector and a buildup of private interest as well. There is opportunity, there is great value like that is really exciting. And it's a great point at which we end. And Mike, I would just like to thank you for your time, is really great.

Thanks for having us, and we'll see you next year.

Thanks, Mike. Thanks so much for joining.

Okay, take care. Bye.