Fries: The Network Is the ‘Secret Sauce’

Liberty Global chief call for more investment in cable’s ‘core competency’

Why This Matters

Cable providers should “fight fire with fire” by keeping their networks in top shape, Liberty Global CEO Mike Fries said.

DENVER — Cable operators are facing competition on all fronts, requiring them to develop and launch new services at a clip that’s never been as rapid.

But staying ahead of old and new rivals also means that MSOs must continue to invest in their “core competency, which is our networks,” Mike Fries, CEO of Liberty Global, said here in a Cable-Tec Expo keynote conversation with Tony Werner, president, technology and product at Comcast Cable, on Oct 18.

“[The network] is the secret sauce for us,” Fries said. “We fight fire with fire.”

Making sure those networks are humming and updated keeps cable ahead of the capacity curve while also keeping new competition in check.

One such competitor that came up was Amazon, which has “unprecedented scale” and “unquenchable ambition.”

“A press release from these guys can disrupt industries,” Fries said.

Video Still in Vanguard

Though video represents only one-third of Liberty Global’s revenues, advancing that platform remains paramount, Fries said, citing his company’s work on its Horizon service and the company’s adoption of the Reference Design Kit, a pre-integrated software stack for IP-connected set-tops and gateways.

Fries said Netflix proved out how seamless functionality and navigation across screens is now critical, believing that Liberty Global, which is integrating Netflix on its own boxes, has bridged that “functionality gap.”

Tying in Netflix is leading to more video consumption on Liberty Global’s platform and those customers tend to churn less and pay more. “Why wouldn’t you put Netflix in that box?” Fries said.

Turning to broadband, Fries said that service has been “the weapon of choice for us for some time” in Europe, calling it the company’s “killer app.”

The average customer, he said, now gets a 100 Mbps service on average, with “bull’s-eye” speeds of 150 Mbps and 250 Mbps.

“We’re not selling anything with two digits anymore,” Fries said, adding that 90% of Liberty Global is now DOCSIS 3.1-ready, and is moving ahead with a D3.1 trial in Germany.

But Liberty Global, as some of its U.S.-based peers are becoming, is also a mobile company that delivers a quad play largely through agreements with carriers that lets the MSO control the experience and essentially rent the towers.

“We’re all-in on mobile,” Fries said.

Fries also addressed the challenges Liberty Global and others in the industry face when it comes to attracting top talent.

He said Liberty Global is now “agile” in an entrepreneurial sense.

“We’re bobbing and weaving where we need to be …. We’re also in the center of everything that’s cool that’s happening,” he said, citing areas such as internet video, broadband, the Internet of Things and the content business. “Things are pivoting around us.”

Werner acknowledged that cable might not always be the first choice for some, “but we can compete in that [talent] market.”

Rebuilding in Puerto Rico

Earlier in the conversation, Fries also addressed the massive challenges Liberty Global has been facing in Puerto Rico and other islands that were devastated by massive hurricanes.

“It’s about as bad as it gets,” Fries said, noting that the company has about 1,000 employees in Puerto Rico alone. Of the 1 million homes there, less than 1% are currently online.

“We’ll rebuild the networks,” Fries said. “But [it’s] more important to rebuild communities.”

Liberty Global has raised about $1.5 million for relief efforts. “It’s been rough, but I think we’ll rebound,” he said.