Name of the Company: Liberty Global
Business Sector: Telecom and Mass Media
Operating Geography: North America, United States, Global
About the Company: It is an American International telecommunications and Television Company formed in 2005 by the merger of international arm of Liberty Media and UGC. It is headquartered in Denver, USA. It has 47,000 employees.
Revenue: $18.3 Billion (2015)
SWOT & PESTLE Analysis
|1. Commitment towards improving customer experience |
2. Largest player in Europe
3. Healthy financial statement with high growth rate
4. Strong operating performance in Europe
5. Great improvement in video performance
|1. Limited presence in few countries of Europe and Latin America
2. Less telephony addition (less RGU) in most of the European countries
3. Decrease in revenue in Q3, 2016
|1. Business acquisition – to become market leader in America|
2. Expand their reach to other developing countries with less competition
3. Focus on future – 4G mobile communication
|1. Intense competition
2. Government rules and policies
3. Donald Trump effect
4. Disturbances in weather conditions or natural calamity can produce a fault or damage the wiring and cable
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1) Commitment towards improving Customer Experience: The focus of the company is to always keep evolving with the demands of the customer and get updated with the latest technology so as to produce the better product for the customer.
2) Largest Player in Europe: It has the highest market share in Europe and therefore is enjoying its strong dominance in Europe. It has over 29 million customers, 60 million RGU’s and 10 million mobile subscribers in Europe and Latin America. It generated an overall Revenue of $20.1 billion.
3) Healthy Financial Statement with high growth rate: As per their financial report number of subscribers increased by 35% in Q3 of 2016, including 284,000 RGU’s. Operating Income increased by 60% YOY in Europe and 108% in Latin America. OCF growth is more than 5% for both Europe and LiLAC. Moreover, they repurchased $640 of equity in Q3 of 2016, totalling $1.6 Billion YTD. The company has $4.6 billion of total liquidity including $500 million of cash in hand.
4) Strong Operating Performance in Europe: Operating Income for the three and nine months ended September 30, 2016 grew by 60% and 17% making a total of $764 million and $1.8 billion respectively, whereas the OCF growth was 3% and 2% respectively during the same period in Europe.
5) Great Improvement in Video Performance: There has been a positive growth in the video business of the company. There has been a 40% year over year decline in video attrition rates in Q3, 2016 resulting in 22.5 million video in this quarter. There were 14.3 enhanced video subscribers and 7.4 million basic video subscribers. This was a result of 11,000 net video additions in the U.K.
1) Limited Presence in few countries of Europe and Latin America: Till now it is only present in 12 countries of Europe and 6 countries of Latin America. It is still not heard of in most of the Asian countries and many established countries in the World. It’s dependence on only a few countries is surely a worry for the company.
2) Less Telephony addition ( RGUs) in most of the European Countries: In most of the countries of Europe, Telnet added 4000 RGU’s, a decline in the prior year period because of less telephony additions.
3) Decrease in Revenue in Q3, 2016: The revenue remained flat and decreased by 2% for 3 and 9 months ended Q3, 2016 to 611 million euros and 1819 million euros respectively as compared to corresponding prior year periods due to decrease in cable subscription Revenue.
1) Business Acquisition: The Company is the market leader in Europe but it still has some distance to go to become a market leader in Latin America. The company lately acquired CWC to expand its position in Latin America but they need to acquire more companies especially in the mobile 4G domain to become the market leader in America and to expand their business in other countries as well.
2) Expand their reach to other developing countries with less competition: Till now the company has presence only in Europe and America. They need to expand their operations in other emerging markets as well to expand their reach and to gain revenue and make use of different economies.
3) Focus on Future – 4G Mobile Communications: The Company needs to focus on the future that is mobile communications with 4G network. Everyone these days is moving towards mobile and 4G network is the future. Therefore, the company needs to be prepared and ready to launch their services to meet this demand in the market.
1) Intense Competition: There has been a rise in the competitors of Liberty Global in the recent years with some of the major names being EutelSat Communications, SES SA and Kabel Deutschland Holding AG. These companies are giving a tough competition to Liberty Global and might eat into their market share in the future.
2) Government Rules and Policies: As we know this business is dependent on the government rules and regulations. With change in the government their policies including rules and regulations can also change which might be a challenge for the Company.
3) Donald Trump Effect: Donald Trump has announced that the minimum salary to get the H1-B visa has been more than doubled to $130,000. The company would not be able to hire workers at a cheap rate from the Asian and other countries and therefore they might have to pay more salary to the employees leading to the overall increase in the cost to the company.
4) Disturbance in Weather conditions or natural Calamity can cause a fault or damage the wiring and the cable: Heavy rainfall or a natural calamity can surely produce a fault in the wiring and can also disturb the networks in a region. Therefore, this can be a major threat for the company as different countries are prone to different calamities such as thunderstorms or flooding due to rain and they might have to repair the wirings and cables in such cases leading to a lot of loss for the company.Liberty Global SWOT analysis has been conducted by Aman Garg and reviewed by senior analysts from Barakaat Consulting.
 Liberty Global: http://www.libertyglobal.com/about-us.html
 Liberty Global Earnings Release: http://www.libertyglobal.com/pdf/press-release/LG-Earnings-Release-Q3-16-FINAL.pdf
 Liberty Global Fixed Income Release: http://www.libertyglobal.com/pdf/press-release/Liberty-Global-Fixed-Income-Release-Q3-2016-FINAL.pdf
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