Did Liberty Global just pay Arthur D Little to publish research that shows it has very little future?

Having spent some time reading Arthur D Little's latest report, Unlocking GigaWorld Innovation, I have to ask why was Liberty Global associated with it?

If you liked the @adlittle report, you can find out more about our #GIGAworld campaign here at https://t.co/yFaVPj4fnu

— Liberty Global (@libertyglobal) September 20, 2017

If you take the time to read the report very little of what the outline can be served by the services currently sold by Liberty Global unless I have missed them building a massive Business Services unit to match those of BT Global Services and Vodafone Enterprise Services. The report in itself seems to be of the sort written by Analysts in order to justify a particular market and has a degree of optimism even a Blockchain booster my call over confident.

If the report is a forecast of what is happening rather than what might then Liberty Global does not have the product portfolio or workforce that is capable of grabbing the opportunities and thus faces the terminal decline of a British High Street shopping chain that failed to engage suitably with the Digital Consumer.

Go take a look and tell me if I'm fooling myself!

Virgin Media investment plans

Over the weekend Virgin Media revealed it's latest investment plans to The Telegraph. It is seeking to expand it's network asking Liberty Global to increase it's investment to grow the footprint of it's Fibre network a £3bn plan to grow from 50% of households covered to almost 66%.   

Given that interest rates are at all time lows and Virgin have said that the investment has a good return in growing the customers base in areas where they are new entrants rather than established provider why are they not seeking to be aggressive and double the investment? The reports on broadband coverage in Britain say that the costs are not commercial for just the last 10% of households and so the capacity is there to almost double what Virgin already has. 

We could say that Liberty Global is being cautious given the uncertainty around Brexit and its economic impact or as a Global player the upside of investment outside of the UK is greater than inside.  One option would be for Virgin to become more of a player within the Business market which its brand does not speak to other than in the small business sector, some players are realising that BT is providing a very poor quality service.   

Is Virgin gaming the market to such an extent that it knows that investment is infrastructure is like betting on England's football team? It needs to stay in the game and the cost of new customers is lower in areas that it is an entrant to rather than established in that they are likely to buy a bundled service bigger than that established customers.

Valuing Vodafone

Yesterday Vodafone reported that it was no longer talking to Liberty Global about an asset swap and many analysts called it a mistake.  I have always seen it as a foregone conclusion, Liberty Global wants to exit Europe it has very little of interest to Vodafone and the pricing was always out of sync.

Earlier Malone had said that no deal was likely to happen with Vodafone as despite an investor roadshow pitching the "benefits" of such a deal to stockholders he had been unable to convince Executive inside Vodafone that a deal made sense and the price was right.

What has been a surprise to me is the rent a quote brigade who are all happy to say that it was an error on Vodafone's behalf.  Telecoms in Europe is a marginal one when it comes to profitability and more customers does not necessarily mean that the odds are better for success.  Investments are high and prices are falling, this could explain why Liberty wishes to exit before it can no longer pay debts, and competition is intense. Vodafone under Colao has not been about market share at any price rather it is about effective management of assets and seeking to maintain margins. Thus taking on Liberty's properties in Holland and Germany was not going to survive an introductory discussion.