Pouring a bit of cold water on the hype around 5G, Liberty Global CEO Mike Fries questioned whether there’s a big enough of a financial return available to justify the amount of capital that will be required for a major shift to the emerging, next-gen wireless/mobile platform.
“We worry about that leap,” Fries said this week at the Mobile World Congress confab in Barcelona, Spain, noting that Liberty Global is in the mobile game now in nine countries in one way or another.
“We think 5G is actually at a crossroads,” he said, noting that capital requirements should be part of a 5G discussion that has centered on collaboration and cooperation. “It’s not pre-destined,” he said of 5G.
5G, Fries pointed out, will require a massive investment and involves more than “spectrum and chips.”
He fears that such an investment might not be forthcoming, particularly in Europe, if the environment in which Liberty Global and others operate doesn’t become healthier and if the mobile market there does not go through a wave of much needed consolidation.
“120 operators vying for declining revenues is a difficult place to be in,” he said, noting that a consolidated fixed broadband market does present competition and benefits to the providers and consumers.
The U.S., he said, “has it right in many respects” pertaining to mobile and the number of competitive players.
“It’s going to be a difficult act here in Europe to see this 5G vision come to fruition if we don’t create a more stable competitive environment,” Fries said.
Though 85% of Liberty Global’s revenues come from fixed broadband and video services, “we are rapidly evolving into a fixed and mobile converged company,” he said. “We’re committed to that.”
However, “if you want investment in 5G, there has to be an opportunity to get a return,” Fries said. “Or else it’s going to be spotty and high profile and not mass scale…There are too many mobile operators in Europe today. it’s very difficult to see a return with that much competition.”
Boiled down, he said the 2020 target being placed on full 5G “is too aggressive,” holding that there’s a lot more room for 4G/LTE growth. “I think it will be an evolution, not a revolution.”
Fries also discussed Liberty Global’s position on owning and controlling the content it makes available through its platforms.
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Without a Disney or a Time Warner, Europe is more fragmented with respect to content, but that has not stopped Liberty Global from taking a more targeted approach by acquiring sports rights in Holland and Switzerland and investing in production companies. Expect more of that.
“I think the cat’s out of the bag,” he said. “It won’t be long before companies like ours and others are integrating vertically, owning and controlling more content.”
