Executive Summary / Key Takeaways

• Value Unlocking Through Deconsolidation: Liberty Global is actively pursuing a strategy to unlock significant shareholder value by separating its core operating businesses and growth assets, drawing a clear blueprint from the successful Sunrise spin-off. This aims to eliminate the persistent conglomerate discount currently applied to its stock.
• Network Modernization and Technological Edge: The company is making substantial investments in future-proofing its networks through aggressive fiber rollouts in the UK, Belgium, and Ireland, and a cost-effective DOCSIS 4.0 upgrade in the Netherlands, which promises 8 gig speeds by late 2026 at a fraction of fiber build costs.
• Operational Momentum and Strategic Partnerships: Liberty Telecom's operating companies are demonstrating sequential improvements in broadband net adds and fixed ARPU, supported by strategic initiatives like flanker brands, AI-driven retention tools, and network sharing agreements, notably with Proximus in Belgium.
• Optimized Corporate Structure and Capital Allocation: Liberty Global is significantly reducing its net corporate costs, with guidance improving to -$150 million for 2025 and visibility to -$100 million for 2026, aiming to enhance its valuation narrative. The company also plans $500 million to $750 million in asset sales and up to 10% share buybacks in 2025.
• High-Growth Investment Platforms: The Liberty Growth portfolio, valued at $3.4 billion, holds high-potential assets in digital infrastructure (EdgeConneX, AtlasEdge) benefiting from the AI boom, and the rapidly expanding Formula E championship, providing capital rotation opportunities and further value creation.

A New Era for Liberty Global: Strategic Transformation and Value Realization

Liberty Global Ltd. (NASDAQ:LBTYK), founded in 2004, has evolved into a dynamic operator and investor focused on European broadband, video, fixed-line telephony, and mobile communications. The company's current strategic imperative is to bridge a significant valuation gap, which management believes assigns zero equity value to its Liberty Telecom assets. This ambitious goal is underpinned by a clear, multi-pronged strategy centered on deconsolidation, network modernization, and rigorous capital allocation, drawing inspiration from the successful spin-off of its Swiss subsidiary, Sunrise.

The telecommunications industry across Europe is undergoing profound changes, marked by increasing competitive intensity, the rise of alternative network providers (AltNets), and evolving regulatory landscapes. Concurrently, broader industry trends, such as the explosion in AI infrastructure and data sovereignty projects, present new opportunities for connectivity providers. Liberty Global positions itself as an agile challenger, leveraging its localized strengths and technological advantages to compete effectively against larger, often more diversified, incumbents like Vodafone Group Plc (VOD), BT Group plc (BT), and Deutsche Telekom AG (DTE).

Technological Leadership and Network Evolution: The Core Moat

Liberty Global's competitive differentiation is deeply rooted in its commitment to advanced network technologies and innovation. The company is strategically deploying a mix of Fiber-to-the-Home (FTTH), upgraded Hybrid Fiber-Coaxial (HFC) networks leveraging DOCSIS 4.0, and advanced 5G mobile infrastructure. These technological choices are not merely about keeping pace but about establishing a tangible edge.

In the Netherlands, VodafoneZiggo is aggressively pursuing a DOCSIS 4.0 upgrade path, aiming to deliver 8 gigabit speeds by the end of 2026. This strategy is notably cost-effective, with the DOCSIS 4.0 upgrade, including the 1.8 gig network, being 90% cheaper than building a comparable fiber network. This cost advantage allows for significant speed enhancements with less capital expenditure, minimizing disruption to existing customers and preserving capital for other strategic initiatives. The current HFC network is already capable of 2 gig speeds, providing a strong interim solution.

Across its other markets, Liberty Global is committed to FTTH. In Ireland, the fiber upgrade is progressing rapidly, with over 650,000 premises already built and 80% coverage expected by year-end 2025. Virgin Media Ireland has launched the country's first 5 gigabit fiber broadband service, attracting wholesale customers like Vodafone and Sky, which is driving network utilization. Similarly, in Belgium, the Telenet network is being transformed through the Wyre NetCo, which is building fiber with an anticipated 85% utilization rate and 100% wholesale market share in its build areas, a testament to strategic partnerships. In the UK, VMO2 already provides access to 7 million fiber homes, with nexfibre targeting 2.5 million fiber homes by year-end 2025.

On the mobile front, Liberty Global is bolstering its 5G capabilities. VMO2 in the UK recently acquired 80 MHz of spectrum, increasing its market share to 30% and securing its competitive position for the long term, enabling the launch of 5G gigabyte services. Telenet in Belgium has been recognized for providing the best 5G coverage, both indoor and outdoor. Beyond core connectivity, Liberty Global is integrating AI tools, particularly within VMO2, to dynamically manage customer contracts and churn, enhancing retention and operational efficiency. These AI initiatives are projected to generate $200 million to $300 million in annual benefits across Liberty Telecom over the next three years, with 70% focused on cost savings and 30% on revenue generation through customer acquisition and retention.

The Sunrise Blueprint: A Path to Value Unlocking

The successful, tax-free spin-off of Sunrise Communications AG in November 2024 serves as a powerful precedent for Liberty Global's current strategy. Prior to the spin-off, Sunrise was valued at approximately 5.5x EBITDA as part of Liberty Global; as a standalone Swiss public company, it now trades at 8x EBITDA with an 8% dividend yield. This transaction, which delivered a $9 per share tax-free dividend to Liberty Global shareholders, demonstrated that a rational market, a less-levered balance sheet (around 4.5x EBITDA), a clear network strategy, and a solid free cash flow story supporting a progressive dividend policy are catalysts for significant value creation.

Liberty Global is actively working to replicate this "Sunrise formula" across its remaining Liberty Telecom assets. In Belgium, the recently announced agreement with Proximus (PROX) to rationalize fixed networks in Flanders is a significant step, aiming for a single network in 65% of the market. A EUR 4.35 billion financing for Wyre, Telenet's NetCo, fully funds the fiber build-out and enables deleveraging of the Telenet ServCo, with plans to sell a significant stake in Wyre to further reduce ServCo leverage to approximately 4.5x. This strategic move positions Telenet for a potential value unlock.

While NetCo plans for VMO2 in the UK have been paused to align with Telefónica's (TEF) strategic review, Liberty Global remains committed to playing a significant role in market consolidation. The existing nexfibre joint venture, which is well-capitalized, provides a vehicle for exploring AltNet consolidation and strengthening VMO2's competitive position.

Operational Momentum and Competitive Positioning

Liberty Global's core Liberty Telecom segment, encompassing Telenet (Belgium), VM Ireland, VMO2 JV (UK), and VodafoneZiggo JV (Netherlands), is demonstrating sequential operational improvements despite intense competitive pressures. In Q3 2025, the company reported sequential improvement in broadband net adds across all four markets.

• Telenet (Belgium): Reported Q3 2025 revenue of $804.9 million, a 2.5% year-over-year increase, and Adjusted EBITDA of $358.9 million, representing a 44.6% margin. Telenet has achieved positive broadband net adds for two consecutive quarters, driven by successful cross-sell campaigns and price adjustments. The multi-brand strategy, including the BASE flanker brand, is performing well and expanding into greenfield areas.
• VM Ireland: Posted Q3 2025 revenue of $122.2 million, up 2.0% year-over-year, and Adjusted EBITDA of $41.8 million, a 34.2% margin. The fiber rollout is on track, and wholesale partnerships are ramping up. CapEx is projected to fall by 50% in the next two years, signaling significant future free cash flow generation.
• VMO2 JV (UK): Reported Q3 2025 revenue of $3,436 million, a 2.2% year-over-year decline, but Adjusted EBITDA grew 2.7% to $1,250.3 million, achieving a 36.4% margin. The UK broadband market is highly competitive, with AltNets offering aggressive pricing and Openreach promotions. VMO2 is responding with new pay TV and broadband bundles (including Netflix (NFLX)), Giffgaff broadband services, and loyalty plans, which are improving broadband performance and postpaid mobile subscriber trends. Fixed ARPU has remained stable after four quarters of growth, reflecting strong retention efforts.
• VodafoneZiggo JV (Netherlands): Recorded Q3 2025 revenue of $1,156.8 million, a 2.3% year-over-year increase, and Adjusted EBITDA of $522.2 million, a 45.1% margin. A new strategic plan has reversed negative trends, delivering the lowest broadband churn since early 2023 and positive mobile net adds. The company is the first to roll out 2 gigabit speeds nationwide and is investing in the Vodafone brand. While the Dutch market remains competitive, the new strategy, including repositioned broadband pricing, is designed to arrest subscriber declines and return the business to growth by 2027.

Liberty Global's competitive positioning is characterized by its ability to execute localized strategies and leverage technological advantages against larger rivals. While competitors like Vodafone and Deutsche Telekom benefit from greater scale and global reach, Liberty Global's focus on integrated services, advanced network upgrades (like cost-effective DOCSIS 4.0), and strategic partnerships allows it to maintain strong market positions in its core European territories. The company's emphasis on customer-centric innovations, such as smart home integrations and AI-driven retention, provides a qualitative edge in user experience.

Liberty Growth: Capital Rotation and High-Potential Investments

The Liberty Growth portfolio, valued at $3.4 billion as of Q3 2025, represents a significant component of Liberty Global's intrinsic value, equating to approximately $10 per share. This portfolio is strategically diversified, with 45% in media, sports, and live events, 40% in digital infrastructure, and the remainder in technology investments, including venture capital in AI, cloud, and cybersecurity.

Management is actively rotating capital, having generated $300 million in asset sales year-to-date in 2025, including a partial sale of its ITV (ITV) stake. The company aims for $500 million to $750 million in non-core asset sales in 2025. Key investments include:

• Formula E: Consolidated since October 2024, Formula E is experiencing significant tailwinds, including double-digit growth in revenue, fans, and viewers. The Gen 3 EVO car accelerates 30% faster than an F1 car (0-60 in 1.82 seconds), and the upcoming Gen 4 car aims to double power. Liberty Global holds an exclusive license with the FIA through 2053, positioning it strongly in the rapidly growing electric vehicle market.
• Digital Infrastructure: Investments in EdgeConneX and AtlasEdge total over $1 billion in value and are performing exceptionally well, capitalizing on the boom in AI infrastructure. EdgeConneX, a global data center platform, has seen Liberty Global's residual stake valued at over $500 million, yielding a 30% IRR over the last decade. AtlasEdge, a 50-50 regional data center joint venture, is valued at approximately $600 million.

Liberty Services & Corporate: Driving Efficiency and Valuation

Liberty Global is undertaking a significant reshaping of its Liberty Services and Corporate segments to enhance efficiency and improve its valuation narrative. Liberty Bloom, which delivers tech-enabled back-office solutions, is on track to exceed $100 million in revenue and achieve positive EBITDA in 2025, with over one-third of its 36 enterprise customers being external to Liberty Global. Liberty Tech, focusing on scaled tech solutions and cybersecurity, generates $475 million in revenue and has consistently increased profitability through sophisticated outsourcing arrangements.

Crucially, management has twice improved its guidance for net corporate costs, now targeting -$150 million for 2025 and projecting visibility to just -$100 million for 2026. This reduction is driven by a significant reshaping exercise in Q3 2025, including a 40% reduction in corporate headcount, expected to yield $100 million in annualized cost savings with minimal CapEx. This initiative directly addresses analyst concerns regarding the historical "conglomerate discount" applied to these costs, which previously reduced target prices by $8 to $10 per share.

Financial Health and Liquidity

Liberty Global maintains a robust financial position, underscored by proactive debt management and a strong cash balance. As of September 30, 2025, the company held $1.67 billion in cash and cash equivalents. It forecasts $2.2 billion of cash at the holding company by year-end 2025.

The company has aggressively refinanced its debt, securing approximately $6 billion across its credit silos year-to-date, increasing to $9 billion with the underwritten Wyre financing. This includes refinancing over $9 billion of 2028 maturities in the UK and Netherlands at reasonable credit spreads, maintaining an average debt life of close to five years. All financings are currency-matched, and bonds are fixed-rate, with bank debt swaps maintaining a 3-5 year fixed profile.

For the nine months ended September 30, 2025, Liberty Global reported consolidated revenue of $3,647.4 million and a net loss attributable to shareholders of $4,220.9 million, largely influenced by non-operating items such as foreign currency transaction losses and derivative instrument losses. Operating income for the nine months was $82.3 million.

Adjusted free cash flow for the nine months ended September 30, 2025, was $426.9 million. The company's TTM Debt/Equity ratio stands at 0.72, and its TTM P/S ratio is 0.94.

Capital allocation priorities for 2025 include up to 10% share buybacks, deleveraging, and strategic investments. While CapEx remains elevated due to 5G rollouts and fiber investments, the company anticipates a significant reduction in CapEx for VM Ireland and Telenet ServCo from 2026, driving future free cash flow.

Risks and Challenges

Despite a clear strategic vision, Liberty Global faces several risks. Intense competition from AltNets and aggressive pricing strategies in the UK and Netherlands continue to pressure subscriber numbers and ARPU. Macroeconomic factors, including inflation and fluctuating interest rates, can impact operating costs and debt servicing. Regulatory developments, such as potential broadband taxes, also pose ongoing challenges. The company is exposed to counterparty credit risk on its derivative instruments and potential impairment risks for its VodafoneZiggo JV investment if market conditions deteriorate significantly. Management actively monitors these risks, employing mitigation strategies such as derivative instruments for financial exposures and dynamic retention tools for competitive pressures.

Conclusion

Liberty Global stands at a pivotal juncture, actively transforming its structure and operations to unlock substantial shareholder value. The successful Sunrise spin-off provides a compelling blueprint for deconsolidation, demonstrating the potential for significant multiple expansion and dividend yield in standalone telecom assets. By aggressively modernizing its networks with cost-effective DOCSIS 4.0 and strategic fiber builds, optimizing corporate costs, and rotating capital from its high-growth investment portfolio, Liberty Global is systematically addressing the conglomerate discount that has historically weighed on its valuation. The company's strategic clarity, coupled with operational improvements across its European telecom assets and the strong performance of its Liberty Growth platforms, positions it for a compelling re-rating. Investors who recognize the ongoing strategic transformation and the potential for future free cash flow generation and shareholder distributions stand to benefit as Liberty Global executes its plan to realize the intrinsic value of its diverse asset base.