The restructuring Liberty Global is about to undertake in Central and Eastern Europe is important on several levels.
First and foremost, it is an acknowledgment by the company that it has to address the imbalance caused by its recent acquisitions in Germany and the UK. These have undoubtedly shifted the ‘centre of gravity’ westwards and left its CEE operations, which are still highly important businesses in their own right, somewhat in the shade.
So much so, in fact, that we are sometimes left wondering when Horizon will become available in Liberty’s less lucrative CEE markets. There’s certainly no roadmap, as has been the case in Western Europe, which we have been made aware of.
Secondly, we will see responsibility for the region as a whole placed in the hands of one key executive – Betzalel Kenigsztein, who has most recently run Liberty’s UPC operation in Hungary.
It’s important to note here that his brief will include not only Liberty’s cable interests but also the DTH platforms it operates in four regional markets. Though by no means a neglected part of the business, the latter are arguably not performing as well as they should be in terms of subscriber additions despite operating in what are highly competitive satellite TV markets.
Thirdly, we will, for what is probably the first time, see the running of two distinct Liberty markets, handed to a single executive. There’s no doubt that Severina Pascu has done an impressive job in turning round the fortunes of UPC Romania and now she has been rewarded by having UPC Hungary added to her brief.
To an outsider, these all look like positive changes and should go some if not a long way towards “rebalancing” Liberty’s business in Europe as a whole. While the revenues the company derives from the CEE are now only around an eighth of those from Western Europe, the region is still important to its overall strategy and is likely to remain so for the foreseeable future.
