Liberty Global Sees Modest Growth Continuing in 2022 as Fiber Investments Ramp Up

Liberty Global struck many of the same themes in its fourth-quarter results and 2022 outlook, emphasizing service convergence, driving improving but still modest growth, and infrastructure investment. Management announced that it and Telefonica are holding discussions with potential partners to create a new U.K. venture to build fiber to 7 million homes by 2028, with Virgin Media O2 serving as an anchor tenant. The move would allow VMO2 and its partners to take on BT/Openreach across 80% of the country, setting up stronger wholesale competition for customers like Sky. The U.K. infrastructure and broadband markets are messy, and we suspect VMO2 is hoping to have a hand in crafting a future that solidifies its position and ensures rational competition over the long run. We don’t expect to significantly change our $31 fair value estimate.