Liberty Global (LBTYA) NSR/BCG Global Connectivity Leaders Conference - New York summary

Industry outlook and opportunities

• Sector sentiment has improved, with stocks up 20% year-to-date and 70% over two years, signaling a positive shift for integrated telcos.

• CapEx is declining, improving free cash flow, while regulatory pressures are easing, especially with the Digital Networks Act in Europe.

• AI is seen as transformational, offering substantial operational benefits and cost reductions, with 90% of employees already using AI daily.

• The industry is leveraging multiple brands, network investments, and differentiation to stay competitive.

• New entrants like fintech MVNOs are not seen as AI-native threats; owning the network and a large customer base provides a competitive edge.

AI and technology transformation

• AI adoption is expected to drive significant cost savings, with ambitions to halve OpEx from $14 billion to $7 billion.

• AI is being used offensively to drive revenue, increase margins, and improve retention and churn.

• The sector is only utilizing a fraction of AI's potential, with a 10x capability gap identified.

• Operational improvements include optimizing network design, reducing power consumption, and anticipating outages.

Competitive landscape and innovation

• Satellite broadband (Starlink) is not seen as a threat in urban or core markets but has niche applications in rural and specialized segments.

• Direct-to-device satellite services are limited by spectrum availability and are unlikely to disrupt core business.

• Fixed wireless access is not considered a long-term winner in core European markets due to spectrum constraints and low ARPU.