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

So, welcome back, everyone, and thanks for joining us. And Mike, thanks for joining us on stage. Mike Fries, CEO of Liberty Global.

Thanks for having me.

As we discussed just offline, a huge amount going on for Liberty Global and in the broader space. We've had these conversations actually in person last year in the U.S. and virtually over the last few years, talking about this gap between public and private valuations and trying to unlock or crystallize value of your assets. Clearly, you're doing a lot about that at the moment, but how would you view that gap now between public and private valuations?

Well, it's still too big. You'd expect me to say that, but even with our stock up 20% in the last 6 months or so, it's a pretty big gap to the average analyst price target and a sizable gap to where we think value resides. If you look at some of the parts that we would create, maybe 40%, 50% gap. And it's -- so the only thing that's changed, the gap is still there. What's changed is perhaps our sense of urgency. And as we've articulated through our calls, the things that we're doing are pretty tangible and concrete. So we're not just talking about it, we're tackling it, I guess, I would say. And that's what you want us to be doing. I mean you can look at it a lot of different ways. You can -- there are some people who say the value of our cash and the value of our ventures platform equals our market cap, which means that $25 billion of aggregate revenue, $9 billion of EBITDA, $3.8 billion of operating free cash flow valued at 0. So you're getting telco assets that we own for free. That's one way to look at it. It all depends on how you approach it. But we're doing all the things we should be doing the Sunrise spin, which I'm sure we'll talk about. And if you don't know about, we are spinning off 100% of our Swiss subsidiary to Liberty Global shareholders, that transaction likely to occur early mid-November. We just had the Capital Markets Day like last Monday, which was well attended. In fact, the team is out on the road this week and last week. And the story there is a straightforward one. You're talking about, we think, the best telecom asset and arguably the most attractive telecom market in Europe's richest country. So it's got a lot of key elements to it that make it exciting and attractive. We can talk about Switzerland. I'm sure we will. I don't know where you have the stock, but most analysts have it around $10 a share. What that means is if we're a $20 stock today, in November, we'll hand you a $10 dividend of a Swisscom share. And we would argue there's no value in our stock for these assets. So we're going to -- half our market cap could be in this 1 stock. Some analysts are as high as $12 a share on a fully distributed basis. So it's almost a $4 billion dividend tax free to our shareholders happening later this year. So these kinds of things, which not many telcos are up here talking about. I'm sure they're talking about what we'll talk about, ARPUs and headwinds and regulators and mergers. We're actually quite a few things happening on the broader financial engineering side to try to bridge the gap that you referenced there.

Yes. I mean there's operational structural stuff that's going on, and there's financial structural stuff that's going on. And Sunrise is front and center for us. So you've alluded to why you're doing the spinoff, i.e., this valuation gap. But could you give us the key reasons why spin-off is the approach you're taking with Sunrise in particular?

Well, a couple of reasons. One, we can do it tax free. I think that's a big advantage for investors. Two, it's an asset that is ready to trade, meaning it was a public company when we bought it. So there's a history to Sunrise in the Swiss market. It's an attractive pure-play in the Swiss market. Swiss investors want to own it. We think that the story, unlike our story has been really from the beginning of time is really a dividend and free cash flow story, which Swiss investors, European investors get. The business is going to -- is already promised a CHF 240 million dividend on CHF 370 million of free cash flow. So put any yield you want on that, you can don't put -- if you put the Swisscom, then you'll get to our stock, but take 8%, 9%, 10% free cash dividend yield. You're going to get to a pretty attractive number relative to where we trade. So it's just too easy in a sense, and it has all those in them, the dividend will also be taxed, advantage for Europeans and Swiss holders. So unlike the Swisscom dividend where you pay tax, you will not pay withholding tax on this. We have capital allowances that have built up. So there's just some really interesting elements that make trading in Switzerland with this asset, a unique opportunity to dividend, gift it to our shareholders rather than have it sit inside the complex, as I started off with getting no value. It's that simple.

Yes. And we'll come back to Switzerland. And certainly, as you mentioned, the free cash flow generation, like you put it kind of almost any yield that any telco is trading on get you to a huge amount of upside, so clearly, there's some skepticism for now on that. And when it's spun off, we'll see hopefully that bridge. There is no such thing as a template for a Liberty Global asset, right? They're all very different and have unique opportunities and hurdles to get over but do you think spin-off is a route to further value crystallization across the broader portfolio?

Okay. If anyone -- I don't many people in here, but if you follow the Liberty story, if you follow John Malone for 40 years, 50 years, almost everything he's been involved with has been spun out. I was spun out of Liberty Media. We spun out Latin America. We're spinning out Switzerland. His philosophy, which I agree with, is that sometimes businesses are better off on their own. They might find a better investor base, better valuation, et cetera. So spin-offs are a natural thing in our DNA. This is not unusual for us to do this. It's something the Liberty family of companies, it does regularly. And so I would put that out there. First of all, it's not unusual. But I think in this case, and perhaps in other cases, it is a really efficient way to not just recognize value, but to reward investors by giving them that value, handing it to you, right? I mean I can tell you what it's worth all day long. If you don't put it in my stock price, it ain't going to be there. If I hand it to you, and it's now in your hands, it's worth what you say it's worth and what the market says it's worth, then you'll decide if you're going to keep it or hedge it or buy more of it. I think that's a healthy thing to do. And not every asset fits that description, but others might likely fit that description as well.

Yes. I mean, as you said, the Swiss macro backdrop and market structure backdrop is really supportive what do you think would be the next closest to that within the Liberty Global...

I mean, we talked about a few things on our year-end earnings call. We talked about some interesting opportunities in the Benelux region where -- we're in Holland and Belgium. There are some things that have to happen before that looks probable or interesting. But it's -- I mean, everything -- we're looking at everything with that point of view, right? How can we recognize and realize value. And if possible, distribute that value. So everything is on them, everything is being looked at in that regard. I don't want to get into detail about which -- what's next, what's not.

But I guess one of the underlying features of that thinking is that the benefits of being part of the group, the economies of scale as large as they were or...

Well, I'd say 2 things to that. And I think every European telco will stand up here and tell you that the benefits of being part of a group working across Europe are not fantastic, maybe Tim would be the only one to say he loves it. But I mean Vodafone's disassembling. Everybody has shrunk the portfolio because cross-border synergies in Europe aren't that great. And the Draghi report, which if you haven't read, I encourage you to read, tells you why that is because spectrum policies aren't the same, because national regulators don't agree with other national regulators. I mean, there's a little about each market that is the same. But it's difficult to realize synergies. Now in our case, our central group is still a significant provider of services, scale-based services to Vodafone, to Deutsche Telekom, to Sunrise. So whatever we're doing at the center that has value in terms of connectivity platforms, entertainment platforms, financial services, we will continue to do those things for Sunrise. And we still do those things for Vodafone, even though they bought those assets from us 4, 5 years ago and other operators. So we're still scaling our central platform where it makes sense. And we're still offering those scale-based benefits if operators want them. So there's -- we kind of have the best of both worlds.

So you brought it up. So I will ask a question about the Draghi comments. We've had full storms in the past in the sector where there have been positive comments from authorities, but they've never actually manifested and some genuinely positive. What's your take on what he's been saying in terms of actual routes to higher returns in the broader sector?

I'm optimistic for a few reasons. I think the way -- if you haven't read it, it's worth a read, read the whole thing, but you can get as a summary of it -- but his basic premise is this, Europe is in bad shape for all the reasons that he articulates, and they're good reasons, and they make a lot of sense, lack of industrial policy and ability to have commonality across financial, regulatory factors and really just happy talk when it comes to 1 big marketplace. It's just happy talk. It's not really 1 big market. And so I think it's a call to action. And one of the many things he says is in the telecom sector in particular, this lack -- this approach to punishing telcos for 10, 15, 20 years because we've all been doing it, you're too young to remember, perhaps the early days, but it has been a decade or more of punishment like not encouragement, punishment and that has obviously put the entire sector in a place where it can't invest, it can't innovate. And as a result, Europe will fall behind. It has already fallen behind, big tech or anything else. And so his call to action and telco is just one of the dozen sectors he identifies is that regulators need to start looking at these industries differently. His advise to the CMA would be ex ante regulation is absurd to try to pretend what might happen. Let it happen and after the fact, come back and fix it if there's an issue, if they don't agree or do the things you want to say. And by the way, there's an opening for that in this market with the CMA, I think. So it's very positive, encouraging and everything we're learning, von der Leyen came out today with all the -- with her team. And it looks like that will be the industrial policy that people are asked to build portfolio and a platform around. So it's encouraging. I think it's on balance, very positive. Now you said it earlier, let's see because this is not the first time somebody said something positive and nothing happens. So it's certainly encouraging to have it happen at that level.

There's a lot of things that slightly positive coming out at the same time though, we've had the deregulation of fiber, you may say I look too young to remember these things, but doing the sector for 19 years, we haven't had any positive regulatory change until the last 5, really. And so -- and then like London buses, if you come along, I wonder if you could maybe just lastly before we move on to the U.K. market specifically, just comment on -- or share any comments you feel you can show in the U.K. CMA?

I think there's an opening. I know that it's easy and convenient and clever to write an article that it's all falling apart. But if you read the -- their statements closely, which I'm sure you all have, they have opened the door to behavioral remedies, which is the first time in my experience that's ever happened here. So if they're honest about that -- well, let me say it differently, if they're sincere about those potential behavioral remedies and the parties walk through that door, I think there's a chance we think the deal should happen. Of course, we've agreed with the MergeCo the things that we needed to see, spectrum reallocation and our mobile networks getting sorted out. But we think it's healthy and smart for markets like this to consolidate. We do not think it will result in any negative implications for consumers. It's already so inexpensive if you look at Switzerland or the U.S. to be -- to get mobile in this market, prices are extremely low. I don't -- they're too low. Let's be honest. And they'll probably keep going lower because there's a bunch of us still competing and there's a dozen MVNOs. And 2 MNOs coming together is not going to make a material difference. So I don't -- I think it should happen. I think it will happen. That's my view.

No, I agree. It doesn't create pricing power going from 4 to 3, but can lead to higher returns, hopefully. Maybe if you look at the U.K., prefaces that you're building out fiber in that process. What's also going on in the market is this fiber network build out from the AltNets. So I wonder if you could talk about -- do you think -- what's going on with the AltNets right now in terms of their build-out speeds? Do you see that slowing? And how you're seeing that actually impact the market dynamics?

Yes. Well, it's definitely slowing. And that's not hard to discern. They talk publicly about their own numbers. I think they're building 40% less than they did a year ago. And you also have leading indicators in terms of permits, opening of the permits, and that looks like also with 45% to 50% decline. So -- but that shouldn't be surprising. I mean, capital is not unlimited. People -- business plans have not been hit, so what happens? People pull back. So I don't -- I think this was all predicted. I don't think it's surprising and shouldn't be surprising. So that's how we see it. And we're still looking at the opportunities for consolidation as you'd expect us to, but that's hard because psychologically, people aren't there yet. They're still -- we look at acquisitions on the basis of 3 things. Where did you build? What did you build? And how much did you spend? When you look at those 3 things, it's hard to sit down from somebody who's got 2,000 a home in it, and they built all on top of you, and they didn't build a great plan to begin with. And you say to them, well, I'll pay you what it would cost me to build and they're like, wait a minute. So it's a bit tricky. We've done 1 deal, a good deal, which is going to exceed our expectations. And I think this will all sort itself out over time, hard to predict how long that will be. And ultimately, there'll be 2 big networks, ours and Openreach, right? We'll get to 21 million, 23 million homes, they'll be at their number. And then you'll have some regional and some other operators, I mean, Greg gets upset with me every time. I don't mention CityFiber. So will they do them? Maybe, we'll see. I mean, this is Sky deal, we can talk about it, it looks like a step in the right direction for them. But it will rationalize in these direction. It's not really impacting us in any material way. Our fixed business is really strong here in this market, which is exciting to be able to sit up here and say, ARPUs are growing 3%. Service revenue is 4%. We've got 40% market share where we have footprint, 40%. We're bigger than BT. I think they're 33% or something. So we're the biggest broadband operator in the markets, and where our average customer is getting 500 meg today, average. So we're already in the speed game, and we can sell a gig everywhere. I'm not suggesting that fiber isn't real, and it's not going to change our strategies. That's one of the reasons that we're building fiber. That's why we're -- we've announced our plans.

You mentioned the CityFiber, Sky deal. So given you mentioned that, I mean what are your thoughts on that? First with BT, we had BT on stage earlier today and their view is that something like this was always going to happen. And actually, it's quite good going into regulatory update in 2026 to actually show there's some competition, it'd be good to get yours...

I think it's a smart no-regret move for Sky. I think it was a desperate move for CityFiber. I'm not going to tell you why I think that, I don't have inside details. But what I think it was a pretty good deal for Sky. Now what will they do with it, TBD. I mean, will they -- as to our understanding that we don't have any details is it's probably not exclusive and there's probably not volume commitment. So all those customers are contestable for BT or anybody else. But they've reset the wholesale market pricing. I'm sure that, I haven't seen it, but I'm guessing they've reset expectations on wholesale rates. They found their way into some fiber homes, that BT hasn't built yet. And as you just said, they've signaled to the market, they're open for business. So I think it's a net positive for all of us. I don't really see any significant negatives there.

And then also to come back to the comments about your 3 criteria for actually buying AltNets, 2, I hope interesting questions on that. One is I guess we're all trying to work out the buy versus build strategy for you guys. Can you give us any sense as to the balance of that? Is it going to be by far, mainly build? Or is it -- or could it be more balanced than that?

Our business plan is entirely built , anything inorganic is gravy. So if you look at next fiber, which is fully funded, the plan is 5 million to 7 million homes, greenfield homes partners with the French infra firm. That's all organic. And then the upgrade of Virgin Media, which I heard that Alison said they're building fiber cheaper than anyone else, not true. We're upgrading for 100 to 150 pounds per home, so it's less. I'm not sure how she's defining her number, but ours is less because we're fully deducted as well. So we're upgrading the 16 million and we're about 4 million into that. So -- we've got 12 million HFC, 4 million fiber and that's growing every day. And we're building out greenfield to another 5 to 7, and that's costing us GBP 500 to GBP 600 a home where we have no infrastructure. So that's obviously the maximum at your cost to build fiber. And if we get all that done without any acquisitions, that's fine. That's where -- we haven't planned on any.

Just a couple more questions on the U.K. and then we'll shift to other markets, clearly. What happened with cable, when cable rollout didn't work out in the late '90s is sold on the cheap and then the cable buyers, including yourselves, were able to price them cheap to the consumer. And obviously, that brought down pricing levels. What do you think is the incentive for AltNets to remain rational through this consolidation phase and given they're struggling to make returns on their investments?

Well, listen, I've never seen irrational behavior yield a return. So I guess on one hand, it would be just their hope for a return of capital. So I don't -- it would seem crazy to me to lower prices to a point where there's no return for them or anybody else that doesn't get them their exit or their growth or their financing. So that's it. Now will that happen in pockets? Perhaps. But I don't -- we're already seeing pricing in that gig range kind of gravitates, it's not that different, really. Everyone is in the same ballpark at a gig. So we'll see how that unfolds.

And then just lastly, on the U.K., I think, as you're doing a NetCo, ServCo split. I wonder if you could just talk through the decision behind that strategy and how you time lines to that?

Yes. Well, I mean we're not the first group in Europe or anywhere to think about delayering. I'm sure you talk to Telefonica or anybody else, it's a common approach, but why are we thinking about that? There's a couple of reasons. Number one, it's clear that our networks are undervalued and underutilized. That's just a flat statement that can't be argued with. The networks have value, but they're undervalued and underutilized. So if you can take those networks, invest in them, move them aside and have them focus, investor attention and our own attention on that fiber asset and more importantly, bring more utilization to that asset. That's an accretive step. So it's about focusing investors on the value of the asset. It's about raising capital to accelerate both the upgrade and the migration of customers to the asset. It's about generating a new source of revenue on the asset, it's also beneficial to your core B2C and B2B businesses. So there is a logic. Does it have to happen in every instance? No. In our case, we're still working through the details of what that might look like, but it's not changing our basic strategy around fiber. It's just whether we put it into a separate entity or whether we keep it integrated. In Ireland, we're fully integrated. In Ireland, we have Vodafone and Sky using our fiber network, paying us wholesale fees, fully integrated to the OpCo. So it can be done either way. But in this market, there's enough good reasons to explore a NetCo that's what we're doing.

And bringing on a partner, the decision on that is like the next 6...

No timing, really. I mean we think this is a 2025 event, as I said on our last call, anyhow. No real timing.

Okay. Cool. And just lastly, the ServCo trend, obviously, there in greater focus. If there's a split, I guess, ServCo trends across Europe from a cable spec -- well, a broader perspective have been muted. So how do you see in terms of the outlook for your U.K. ServCo?

Well, look, it's a tough market. If anybody set up here and said they're -- we're kicking a**, they're lying to you. It's not true because the fixed business for change is outperforming. So we're growing fixed ARPUs. We're driving fixed service revenues. We're holding market share. So the fixed -- we're keeping more of the price increases. We're doing a better job of retention. The mobile business, sadly is we're underperforming in a soft market. And there's a lot of reasons for that. But Lutz and the team are squarely focused on investing in the network. We've got some big product launches with the new iPhone and new Pixel phone. So fourth quarter, we're trying to regain some momentum in the handset and mobile business, and I think they're set up to do that, but it's been a tough year for mobile. And I'm sure BT -- I know BT has said the same thing, Marco Lara, I think says, it's tough this year in this 25 years. So we're not alone in sensing this, it's -- with the cost of living crisis lingering, people are focused on hanging on to handsets, lowering prices, and that's difficult for handset volume and churn.

And have you seen any change in competitive intensity there?

Not really. I mean, we'll see what the fourth quarter brings. It's really all about the fourth quarter.

Okay. So maybe if we move on to Switzerland, I think you've well articulated why Switzerland is a good backdrop for a spin-off and you like the market backdrop. Can you just talk through the competitive landscape? Because I think at the CMD, you communicated it as a great market structure in 3 players. But I guess part of the fixed broadband market structure is a subscale third player, i.e. Salt. So how do you think the market dynamics are evolving post -- the Salt post deal?

Yes. Well, when you contrast the Swiss market, let's say, the U.K. market, it's gone a night-and-day. It is a 2.5 player market, a 3-player market and people -- with ARPUs that are 2x this market, right? So we're starting with high ARPUs and relatively rational pricing, where flanker brands, and we have the biggest digital flanker brand in the market are 10% to 15% cheaper not 80% or say even 50% cheaper. So a pretty rational market. And what Sunrise has is 3 interesting growth engines. Number one, the premium brand, Sunrise, where Roger Federer is our ambassador and the Swiss key team, we support them, has just all the energy, right? We have this great loyalty program. It's really a winner. And that, we think we keep driving growth in that with innovation. The flanker brand, Yallo was born digital, is digital, 70% of sales are digital and is in that kind of smart shopper segment. It has its own identity, its own growth and potential. And the B2B sector, if you look at it, we got 20% market share. And that's a 2-player market. There's something to get and more importantly, the ICT sector in Switzerland is 9x bigger than the core connectivity sector, and we got nothing there. So you've got B2B opportunity, you've got the flanker brand covering your different segments and the premium brand. All those things should drive relatively stable positive growth, but the real story is about free cash flow and dividends. I mean we've said we're going to continue to -- in a declining CapEx curve, 16% to 17% going to 15%, which is pretty low. If we can keep generating the free cash flow, keep paying the dividends that we want, keep delevering the business from 4.5% to 3.5% and that becomes a nice positive virtuous circle there in that marketplace. The stock has a lot of room.

Yes. Well, maybe let's just come back to free cash flow. I just had 1 question on the kind of top line growth or the growth outlook for the market. So I think you may have answered this, but maybe let's ask specifically. So Swisscom says Swiss revenues can't grow because Salt has such a great wholesale contract on its own -- on your fiber wholesale contract. You also have a pretty good fiber wholesale contract. It's not absolutely clear to us that it's identical to Salt's, but I guess it's pretty close. And question number one, I guess, it's pretty close. And then question 2 is in terms of your growth outlook, which you laid out in the CMD, what do you think the difference is between Sunrise's growth outlook and Swisscom's flat out?

Well, I think we'll -- I don't know what Swisscom's forecasts are. I doubt we're looking to grow materially faster than they are. The markets -- these are big healthy markets that will grow modestly. But if you're growing with the market, there's an opportunity to drive margin. We've got our synergies largely behind us. We've got a lot of positive things happening in OpEx and CapEx. So I think the focus is free cash flow. You want to be growing, you want to stay stable, you want to -- you steal share from the incumbent and we will, but it's all about that bottom line. if you will . You were asking a question on Networks. I want to be sure I got it.

Yes. It's just the wholesale deal.

We're not going to be able to disclose the details of it. But remember, 55% -- well, we reach almost 60% of the country with HFC, which is a great platform, right? We're already at 2.5 gig everywhere. So you call us up, half the people who call us up and want service, we service with HFC up to 2.5 gig. And so I think that stays relatively the same and where we need fiber, we just rent it. And so we also have 75% coverage of fixed wireless access at 100 meg. So we've got it all in that market. And that hybrid approach is going to, I think, allow us to avoid any big CapEx moments going forward while we drive, where we steal, slowly steal share from an incumbent with 60% of it. And over time, it's getting distracted in Italy and what's the government going to do with their stake. I mean it's setting up nicely.

Well, that's what we're getting to, like, as you say, CapEx visibility and net free cash flow, which is ultimately the question but it is like quite unique. Every cable market seems to be unique. But in this market, it seems like the routes to fiber, the route to upgrade in the network is more likely to be through rental than building out your own fibers. Is that how you see it going?

Yes, and there's a couple of reasons for that. 45% of the base was already on Swisscom's network when we bought Sunrise. We've moved them over where we can, and we continue to move them over to get rid of the Sunrise, the Swisscom wholesale fee. But as you've indicated, you've implied it's a good deal. It's a pretty good deal, and it's allowing us to be competitive where we need to be. But we're pushing the equation well with our own network, too. By the way, DOCSIS 4 is real, okay? I mean, the entire 70 million or more cable homes will go DOCSIS 4 in America. It's a real technology. We don't talk about it here in Europe because everybody has abandoned the idea of it, but it's real, and it can be done much more cost effectively than anything. So we have options there, which is a good thing. And we'll make the decisions that optimize free cash flow.

Yes. So I think if you come to a conclusion on Switzerland, you've kind of articulated the growth outlook market structure, et cetera, and the B2B growth outlook, in particular, the CapEx visibility, if we were to just say, hypothetical, the market is, obviously, not pricing that in now in terms of looking at Liberty shares, although that may change -- hopefully changes by the end of this year. Where is the risk factor do you think in terms of your free cash flow guide? Because as you say that...

In Switzerland?

Yes, in Switzerland. Upside or downside?

Yes. I think the upside is we do a better job on the top line, on growth. We do a better job on OpEx efficiencies. We're borrowing at 3-plus percent interest rate. So while we are -- if we keep delevering that will come down, but it's a pretty cheap structure today. So I do think there are ways to just fine-tune it. But our forecasts are pretty modest. So we said CHF 360 million to CHF 370 million of free cash flow this year, going to CHF 410 million in 3 years. We're not trying to hit the ball out of the park. We're trying to demonstrate that we can predictably distribute 70% of that free cash flow to investors in the form of a dividend in exchange for a reasonable dividend yield, which should get us to a price that's well in excess of where our stock is trading. So I mean, it's an obvious set of steps to take. Longer term, we'll see how the market prices it. I mean, if you're a Liberty Global shareholder and you end up with a bunch of Sunrise shares, it's going to be choppy. We think 25% to 30% of shareholders just say not for me. So who wants to own this and we're going to have ADRs, unfortunately, to begin with. And then so it's going to be an interesting 6 to 9 months of rotation as our investors, who may or may not want to own the Swiss shares to find new investors who may want to own those Swiss wishes. But I think longer term, is the real story.

VodafoneZiggo is obviously just shifting newer market now, it's obviously not an uncomplex business either in terms of leverage, et cetera, but it has over previous year, generated strong growth, free cash flow growth and free cash flow generation. Last recent quarters, the customer trends have been a bit more mixed than the free cash flow. There are some headwinds. What's your outlook in terms of what can improve that -- those trends and how do you think about that?

Yes. That business, listen, that's a rational market. The incumbent is quite strong. We have the largest broadband base in the market, bigger than KPN, but KPN is really good at what they do, that's for sure. And the only 2 AltNets in the market aren't overbuilding each other. So it's a pretty rational market. And we're finding that even though we have HFC everywhere, nobody switching off our network for fiber because it's fiber. It's because it's cheaper. So the real issue is can we grow with the market and hold market share in broadband, yes or no. And that's the challenge. And we're doing that in many ways, one of which is we have great content. We have the UEFA football rights. We have the ability to draw people to our platform in ways that we don't do in other markets. We have great quality of service. Our NPS is very high. I mean we've got a lot of things going for us to keep that broadband momentum and convergence and then bringing down costs. So there's real OpEx efficiency opportunity there. So is it going to like the world on fire? No, but it's generated $4 billion of dividends to us and Vodafone since we did the deal. It's a cash flow machine. It's going to remain a free cash flow machine. A cash flow might do this, but it's a free cash flow producing asset with great characteristics in a rational market. We just hired a new CEO who's doing so far, so really well. Stephen van Rooyen, who is familiar to many of you in this market. He's got his work cut out for him, but I have real confidence that he's going to attack that opportunity in a unique and in an interesting way. And we have to figure out what's going on with our partners. I'm just going to anticipate your next question because we've been at this 7 years with Vodafone, and I love that. Margherita is a fantastic partner and friend and operator, but 7 years is a long time for joint venture. So we need to think about where we're going with that business, especially in light of what we started up in the beginning talking about is, what's our end game for some of these businesses. And so it begins with that conversation, which I have nothing to update you on, except to say it's a natural one for us to have.

Yes. The final question on, it was going to be the next question. The final question was just going to be on the price rises. You described it as a rational market, which it is, it's a great market structure. Odido, I think is being a little bit more promotional or aggressive at the moment in mobile and perhaps on broadband, too. And also the price rises we saw this year weren't quite -- I mean, obviously, different inflationary backdrop but still relative to inflation weren't quite the price rise as we saw last year. Do you think that your competitive behavior is okay in terms of -- or in line with what you had expect?

You're taking price increases relative to inflation. So I think inflation last year was 10%. We took 8.5%. This year, it's 3.8%, we took 2.5%, something like that. And -- but we take it on front book, back book, a lot of operators in the market don't do that. So I think it's the right move. And we want to keep stay price competitive, so, yes.

Yes. Okay. So let's move on to Telenet. And loads of potential change going on in that market. So if you could help us kind of sift through the range of outcomes, but you've got the potential DIGI entry, which is always seemingly a little bit delayed. You've got your own fixed entry in the South, and then you've got this potential fixed infrastructure cost sharing framework. How does that obscure your visibility on the kind of free cash flow outlook for the business?

Not really. Listen, DIGI is already baked in. So if you're not following Belgium, which many of you probably aren't, DIGI, who's operations Portugal and Spain has -- is ready to launch, which is great. Unlike those other markets, ARPUs are already very, very low in Belgium and they're renting network, fixed and mobile. I don't -- we do assume they're going to get to a certain market share. But if their motive is to generate any profit, I don't know how they do it by undercutting massively the rest of us. So we'll see what happens. We're a little less vulnerable, I think, than Orange and others because we're more of a premium product in that marketplace. Moving into the south is all NPV positive. So BASE is our flanker brand. We're moving into the South. We're doing well. We're exceeding our expectations on broadband. It's a full telco launch.

So there's a customer traction...

Yes, so far, so good. And then the deal, this is, again, I'm sure you guys follow this, but we are building fiber. We have a NetCo in Belgium and Flanders, we are going to build fiber through out 70% of that country, of that region of the country. And recently, we struck a deal with Proximus, the incumbent at the encouragement of the government. Hear me now, who said, they own a piece of Proximus, obviously, we sure like to see you guys work together on fiber. So whereas we were going to build all that fiber ourselves, now we're going to build fiber in a portion of the country on our own in competition with them. And remember, we have 65% utilization with Orange already, so great return. And in another portion of the country, we're going to divide and conquer, where we'll build here, they'll build there, and we'll whole buy from each other, which means the network that we build will be 95% utilization. Pretty good outcome. NPV-positive, needs to get the blessing of the communications regulator, but was already in the queue. So if that happens, it's a real positive outcome for -- not a lot of CapEx avoidance, but there are no NetCos that I'm aware of anywhere in the world with 95% utilization. So we can create more of that. That's a pretty good opportunity.

And how do you think that's going to be regulated or what's the inside...

Well, the regulators seem to be favorably inclined, they encouraged us to reach this understanding. So what's the regulation? I mean, wholesale rates, we've already said. I mean, it's just -- they're trying to create a rational infrastructure environment, which is terrific for us. The opposite of this country, 180 degrees.

You mentioned ventures when you're building out that kind of portfolio valuation right at the start, so it's a quite good way to end, I think, in terms of your portfolio. So you raised your formulary stake. How should we think about the cash generation of your ventures business and then how do you think it?

Real quick. So we started the year with $4 billion of cash at the TopCo and we have no debt at the TopCo, just for those who may not be familiar. At the end of the year, we'll have plus or minus $2 billion of cash because we're putting $1.7 billion of cash into Switzerland so that we can put it into your pockets basically because that lowers the leverage, raises the equity value of the company, and we hand that to you tax-free. We said we would sell, I think, $500 million to $1 billion. We've sold $650 million stuff. We got another $100 million, $15o million to go. So we have opportunities to monetize assets off the FMC telco footprint. And we'll continue to do that, and there are opportunities to do more. We will also, though, in some of those opportunities look to invest like in Formula E, which I think is something for us quite attractive, grew revenue 20%. There's 400 million people in the world who watch it. It's got some tailwinds around electricity -- electric cars. We've been net zero from day 0, this Gen3 EVO car is going to be in F1 car, we have Porsche, Jaguar, a lot of good things happening in Formula E. Taking out Warner Bros was a convenient thing for them, they wanted the capital. And for us, the kind of thing we want to do if we're going to do anything in this venture portfolio, was build stuff with global scale, a real platform. So that's exciting to us. And I think we'll -- but there are opportunities to generate net cash out of that because there's a lot of things in there we don't need to own.

And just maybe final question. How are you balancing everything you're doing, the spinoff, whatever you do with ventures with your broader group buyback, how do you see the broader group buyback fitting into all of that?

Yes. Well, what we've done this year is announced 10% of the shares. And just to put that into perspective because I don't know who's in the room, that will bring us close to $15 billion of buyback. So we have a $7.5 billion market cap, but we bought back $15 billion of stock, not far off the price we're trading in. We had to buy some, we bought some in the higher prices for sure, a little bit higher than where we're trading. So we put down to 350 million shares by year-end from 900 million plus. So that to us has been the right move because the things that we're doing now, that's just -- it's a flywheel effect for those who are still shareholders, it's benefiting all of us. So I think the 10% this year, plus minus $700 million, we're going to hit that number. Are we going to accelerate that? I don't think so. This is a year where shareholders will get a total remuneration of 4.5 -- let's say, $4 billion to $4.5 billion because it's $700 million of buyback. We call that remuneration and a $3.5 billion, $4 billion dividend of Sunrise stock. That's also remuneration. So a pretty good year for investors on a $7.5 billion market cap before all that. So I think it's a pretty good year for investors. I don't see us raising that buyback this year, but we'll look at next year when we get there.

I think that's a perfect point to stop. Thank you so much for your time, Mike.

Thanks, everybody.