Liberty Global's Swiss unit sets up MVNO to boost multi-service play

Liberty Global's UPC Cablecom is entering the Swiss mobile market in a bid to boost its multi-service credentials by adding mobile subscriptions to its mix of home TV and broadband offerings. The move also means that Switzerland has become the last of Liberty Global's five primary European markets to offer cellular mobile services.

UPC Cablecom has formed a mobile virtual network operator (MVNO) agreement with Orange for the use of the network operator's masts, and said it will manage customer service, logistics and all administration itself. As things stand, UPC Cablecom has launched three mobile price plans including data.

The mobile plans will only be available to existing UPC Cablecom customers, and the company is also initially testing the service through a selected group of existing users. Other users will only be able to register interest for now, and will be contacted by the cable operator once the service is available on a wider basis.

UPC Cablecom's caution is understandable in the face of competition from a heavyweight such as Swisscom, which controls more than 60 per cent of the mobile market. The two companies are already engaged in fierce competition for TV and home broadband customers, and UPC Cablecom is now clearly ready to tackle Swisscom on a new front.

However, UPC Cablecom has already had its fingers burned on the Swiss mobile market after the failure of a previous venture with Sunrise in 2005, as pointed out by Neue Zuercher Zeitung.

Ralf Beyeler from Swiss comparison service Comparis told Neue Zuercher Zeitung that UPC Cablecom poses little threat to Swisscom's mobile dominance: he told the paper that the cable operator would gain a few per cent of the market in the medium term, and noted that the Cablecom subscriptions would be of best value to users with low to average mobile data usage. He pointed out that the offers are expensive outside of Switzerland as no roaming option is currently included.

No doubt UPC Cablecom will take on board such criticisms during the test phase of the service. However, more importantly the provision of mobile services means that like its competitors Swisscom and Sunrise, UPC Cablecom will now be able to offer services from all four important telecoms segments: fixed voice, Internet, TV and mobile.

"In Switzerland, incumbent Swisscom is far ahead of competitors in terms of offering an evolved multiplay proposition spanning fixed and mobile," said Natasha Rybak, principal analyst at Current Analysis. "While UPC Cablecom's new products are basic and limited, they will nonetheless bolster the operator's competitive positioning."

The move by UPC Cablecom also means that all of Liberty Global's five primary European markets now offer cellular mobile services.

"For Liberty Global, mobility options including cellular mobile and WiFi are complementary offerings that are becoming more integral to support and enhance the company's core operational portfolio," added Rybak. "Liberty Global views cellular mobile as an increasing requirement for maintaining bundled and multiplay competitiveness in Europe and cultivating incremental customer growth."

Nonetheless, Rybak pointed out that Liberty Global has been slow to add mobile subscribers at its other MVNO operations in Europe, and said the impact in Switzerland will be low in the short to medium term.

"However, in the longer term, UPC Cablecom has the potential to build up its mobile base and exploit strengthened opportunities for incremental revenue growth and enhanced customer retention," Rybak added.

For more:
- see this UPC Cablecom release
- see this Comparis analysis (translated by Google Translate)
- see this Neue Zuercher Zeitung article (in German)

Related Articles:
Liberty's Dutch move signals cable wars ahead with Vodafone
Liberty's Malone concedes victory to Vodafone in Kabel Deutschland fight
Reports: Vodafone, Liberty Global vie over Kabel Deutschland
Virgin deal pitches Liberty Global against Sky

Read more on