The cable giant Liberty Global is exploring a sale of its Swiss and Austrian arms, reported the Daily Telegraph. The owner of Virgin Media has begun work on a potential disposal of UPC Austria and UPC Switzerland, according to sources familiar with its plans. The discussions are understood to be at an early stage and may not lead to a transaction.
Liberty’s businesses, labelled CHAT within the company after Switzerland’s Latin name Confoederatio Helvetica and the official abbreviation for Austria, have been struggling. In the company’s latest quarterly results, its Swiss subscriber base declined and revenues were down 2 percent on increased competition with Swisscom, which has aggressively cut broadband prices. UPC Switzerland has also spent heavily on exclusive sports rights and marketing for its television packages, sending its cash flow into decline.
The business last year reported revenues of USD 1.36 billion from around 1.3 million customers. City sources suggested it could attract bids from Swiss mobile operators such as Salt, formerly Orange Switzerland, which is controlled by the French telecoms entrepreneur Xavier Neil. Salt has signalled its intention to enter the fixed-line market.
Sunrise already offers broadband and landline services via the Swisscom network but could seek better returns by owning its own infrastructure. A City source suggested Liberty might accept Sunrise shares in exchange for UPC Switzerland and cash in gradually.
UPC Austria is a smaller business with most of its cable network in Vienna and revenues of only USD 342 million. It is unclear whether Liberty could seek to sell it separately or as a package with its Swiss arm.
Liberty Global declined to comment.
