Liberty Global offloads Swiss business for $6.3 billion

Liberty Global has continued its great withdraw from the European markets with another sale, this time convincing Sunrise its 1 million Swiss customers are worth $6.3 billion.

Announcing the deal alongside its financial results, it does look to be a good deal for Liberty Global. This is a business which has been going through somewhat of a restructure, attempting to find profit in a challenging industry by refocusing resources, though it now appears the years of aggressive acquisitions and expansion have not paid off.

“The past fourteen months have been transformational for Liberty Global,” said CEO Mike Fries. “After two decades of buying, building and growing world-class cable operations in Europe, we have announced or completed transactions in six of our twelve markets at premium valuations.”

While $6.3 billion certainly pales in comparison to some of the mega-acquisitions we’ve seen in recent years, it might be worth putting a bit of context around this transaction.

UPC Switzerland has passed just over 2.3 million homes across the country, this is more than 50% of Swiss homes, currently commanding a subscriber base of 1.1 million. The video offering currently has a subscriber base of just over 1 million subscribers (645,000 of which are premium) and mobile subscriptions total 146,000.

Whether these figures justify the $6.3 billion which Sunrise is handing over we’ll let you decide, though just as a point of comparison BT bought EE, and its 30 million mobile subscribers, for £12.5 billion in 2014.

For Sunrise, such an acquisition will add buoyancy to already positive momentum. Over the last three months, Sunrise realised 42,300 postpaid net adds, UPC Switzerland was 8,500 by comparison, while Internet and TV subscribers rose by 8.3% and 14.1% year-on-year respectively.

Is telecom losing Europe’s next generation employees?

Telecoms companies did not feature in the top employers’ lists chosen by the current and potential young employees in a recent multi-country survey.

The Swedish consulting firm Academic Work recently published the results of a survey on current and future young employees in six European countries, which asked the respondents to choose their most “aspired” employer, hence the title of the survey “Young Professional Aspiration Index (YPAI) 2018”. Among the three Nordic countries where it broke down the details of the employers the young people most like to work for, Google came on top in all of them (it tied with Reaktor in Finland, the consulting firm behind the country’s big AI drive). None of the telecom companies, be it telcos or telecom equipment makers, made to the top-10’s.

 YPAI 2018

The survey was done in the four Nordic countries (Sweden, Finland, Norway, Denmark) plus Germany and Switzerland. Nearly 19,000 young people, a mixture of students (22%), current employed (59%), as well as job seekers (15%) answered the survey. The majority of the respondents came out of Sweden, while just under 1,000 respondents were registered from Finland and Norway. Presumably the sample sizes were not big enough in the other three countries to break down the top-10 company lists.

YPAI 2018 respondents

In addition to asking the respondents to name their preferred employers, the survey also asked them about their most important criteria when choosing a place to work. “Good working environment and nice colleagues” came on top in four out of the six countries (chosen by 60% of the respondents in Sweden, 78% in Denmark, 73% in Germany, and 66% in Switzerland). It tied with “Leadership” in Sweden. In Finland coming on top was “varied and challenging tasks”, chosen by 60% of those who answered the survey, while in Norway 64% of the young people surveyed chose “training / development opportunities” as the most important criterion.

Once upon a time (i.e. around the turn of the century), telecom was THE industry to work in. It has been losing some of its old lustre to the internet giants. If they “aspire” to re-take the top spot of the young people’s mind share, the Ericssons and Nokias and Telenors of the world may want to refer to these criteria when promoting their corporate image, as a starting point.

Ericsson hails Swisscom deal as 5G proof-point

Swiss operator Swisscom has signed a network transformation deal with Ericsson, which the latter claims is the world’s first commercial 5G deal.

More than any of its competitors Ericsson is all-in on 5G. While Huawei and Nokia have quite diverse interests, including major fixed-line businesses, Ericsson is increasingly looking to narrow its focus on mobile broadband and that, of course, means 5G. It is therefore vital that Ericsson make itself synonymous with 5G in the eyes of operators and the wider world.

At a recent event apparently created to achieve just that Arun Bansal, Ericsson’s regional boss in Europe and Latin America, claimed Ericsson Radio System is the only 5G-ready baseband platform currently available. Nokia and Huawei subsequently begged to differ, but regardless of the technological details, Bansal’s claim showed how aggressive Ericsson’s 5G strategy is.

With that in mind it wasn’t surprising to hear that Bansal was doing a bit of a press briefing drive in support of what could easily be dismissed as yet another deal win story, the likes of which the inbox is usually saturated with.

At the start of the interview we challenged Bansal to convince readers why anyone outside of Ericsson or Swisscom should care. “Because it’s the world’s first commercial deal for 5G,” he replied. Of course every other press release these days has 5G plastered all over it in the time-honoured telecoms industry tradition of over-exploiting the next big thing, so we wouldn’t be surprised to see that claim contested too, but there it is.

“5G is moving from hype to reality,” insisted Bansal, explaining that Swisscom asked Ericsson to make its network 5G-ready, specifically with industrial use-cases in mind. Primarily this seems to involve Machine Type Communication (MTC), via NB-IoT and critical MTC via LTE Cat-M1. This in turn will require the main technological leap associated with 5G – network slicing – so there’s a fair bit of virtualization work being done to prepare the Swisscom network for all that.

The more immediate boost to the Swisscom network from this deal will be ‘gigabit LTE’ via a cocktail of carrier aggregation and massive MIMO cleverness, starting next year. This is more about capacity and network reliability than trying to give end-users 1 Gbps MBB, but Bansal regerred to it as ‘enhanced LTE’ which seems to imply a distinct stepping stone towards the eMBB promised by 5G.

“We would like to offer the best network to our customers in Switzerland – today and in the future,” said Heinz Herren, CIO and CTO at Swisscom, in the canned comments that came with the press release. “That’s why we invest massively in the latest mobile network technologies such as Gigabit LTE and 5G. Ericsson is a true leader in 5G technology and I am convinced that together, we will achieve our goal to deliver greater innovation and provide customers with the best experiences.”

This 5G bullishness is a welcome sign of life from Ericsson, which is still struggling to demonstrate it has turned the corner following years of redundancies and executive purges. Bansal insisted that the Swisscom deal is a ‘proof-point’ of his claims and, while it’s vital that Ericsson reminds the world what a strong player it remains in mobile broadband, but it would be well advised not to labour the ‘first to 5G’ angle too much or it will start to dilute its significance.