UCOMA (Liberty Media Int'l.) presentation (includes Net2Phone discussion)
Janco Partners, Inc.
9th Annual Media and Telecomunications Conference
March 17 & 18, 2004
UCOMA, Mike Fries
UCOMA was the largest mso, and combining with Liberty Media (as Liberty Media International) will be part of the largest mso. This has given UCOMA the ability to take advantage of some strategic opportunities.
Western Europe, approx. 6 million homes passed.
Eastern Europe, approx. 2 million homes passed.
Europe – even though we’re the largest, is a very fragmented marketplace. It’s not like the U.S. The largest in the U.S. has a meaningful share. Our share of the European market place is actually pretty small. So consolidation opportunities definitely exist. And I’ll talk about our acquisition strategy and where we’d like to be in just a moment (listen to url for that).
ccbn.compuserve.com
Now, of course Latin America for us is largely Chile. It is a very successful business for us.
And in total you will see our 9.2 million homes passed.
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On the telephony side, we’ve launched in four markets in Europe. We obviously have an operation in Chile that is quite successful. Over 700,000 total customers today or 16% penetration. Again those numbers skew in penetration. We’re in the high teens in Europe but in the high 20’s in Chile.
Good margins. Good ARPUs for us. But that business is at an inflection point.
And what you’ll find is that for us anyway, voIP is real. It is alive. We are going to be pushing very very heavily this year. And it has all the advantages that people have talked about in terms of lowering cpe costs and making it more acceptable. And I think we’re going to take advantage of that pretty aggressively.
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On the voip side we will be commercial in two markets by the late summer, early fall. So that is happening. And it is a big, big, big initiative.
UCOMA owns cable in Chile, and Chile is the best asset in Latin America per the speaker. Liberty Media also owns another asset in Argentina.
Q&A:
We have already launched a PacketCable hybrid solution. By that I mean gateway to a switch, because we have a switch there in Holland in Rotterdam. I say that is about half a million homes or so. That has got a 1,000 customers today on a trial basis. It’s working fine. What we’ve been doing in that market is using multiple vendor solution and we think we’ve landed on the right vendors. It’s PacketCable technology into a switch so it’s not a softswitch technology. And through the course of the year we will go from, you know, lab to field trial to beta testing, to hopefully commercial launch sometime late summer.
The second trial will likely be in Eastern Europe. Probably in Hungary, and will be a SIP based technology. So it will also feed into a switch and we have a switch in Hungary, so it will be a hybrid if you will. But it won’t be PacketCable, it will be SIP. The primary difference being you won’t be able to offer carrier grade service. You will offer best of class type service. My view on that is that’s probably good enough. You know, if you see what is happening in these eastern European markets, the FTTH -- mobile substitution is huge. And mobile communication in many cases there are more mobile phones than there are FTTH lines. So people obviously decided that 5 9’s isn’t necessary. They’ll take 3 9’s – they’ll take 2 -- you know, it’s not as important an issue. So, my view is speed to market – you know, cost of service, best class of service if you can – you know, not PacketCable with a thick sheath of specs you’ve got to meet, and FTTH looks to be a great way to do that. And from our point of view it will scale and lots of vendors are getting behind it.
We are also looking and in discussions with two other solutions – Net2Phone as a possible technology and a partner in a market or two to see how that works. The real advantage of Net2Phone isn’t so much the hardware, as it is the operating system called CVOS (during the earnings conference call, Greenberg said msos wanted to buy CVOS and were told it wasn’t for sale), which is a very sophisticated OSS platform that brings it all together and it’s proprietary. That has a lot of appeal to us and we’re evaluating that.
We’re in discussions with Skype. I had dinner with the guy who invented Skype not long ago and that to me is an interesting opportunity. Whether we like it or not, our customers are going to Skype each other. I Skype people. I don’t know if you know what I am referring to but it’s real. And with 8 million downloads – it may not be Kazaa. It may not be 350 million downloads, but it might be 100. And from our point of view we looking at whether we can bundle that into our broadband platform. Put it as a content option on the … portal. And, more importantly, since it is a peer to peer solution today, perhaps be their gateway into the peer to peer universal service opportunity. So a customer can call anybody he wants from his Skype address as opposed to just another Skype user. To do that, they need a billing platform. They need infrastructure. They need switches. And you know, I don’t think the phone companies are going to give them much support, so cable companies are a natural partner and we’re looking at that as well.
So we’ve got a lot of balls in the air there, but things are moving so rapidly that I think by mid-year we’ll have narrowed it down and we’ll be pushing this initiative or practically able to give you a little more hard data – you know, where we sit. What our estimates and forecasts are. |
