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Liberty Global PLC (NASDAQ:LBTYA) (NASDAQ:LBTYB) (NASDAQ:LBTYK)
Q2 2020 Earnings Call
Aug. 04, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Liberty Global Second Quarter 2020 Investor Call. This call and the associated webcast are the property of Liberty Global, and any redistributions, retransmission or rebroadcast of this call or webcast in any form without the express of written consent of Liberty Global is strictly prohibited. [Operator Instructions] Today's formal presentation materials can be found under the Investor Relations section of Liberty Global's website at libertyglobal.com. [Operator Instructions]

Page two of the slide details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed in Liberty Global's filings with the Securities and Exchange Commission, including its most recent filed forms 10-Q today as amended. Liberty Global disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based.

I would now like to turn the call over to Mr. Fries.

Mike Fries -- Chief Executive Officer and Vice Chairman

Thanks, operator, and welcome, everyone, to our Q2 results call. First of all, I hope you're each safe and well. And as always, we appreciate you joining us today. Our plan is to run through the slides and prepared remarks for about 20 minutes or so to be sure you're level set on the key messages this quarter. And then we'll spend the majority of our time answering your questions. As usual, I've asked a handful of the key execs to join me on the open line, and I'll be sure to get them involved in the Q&A session as needed. I'll kick it off on slide four, for those who are following along, with a summary of the key highlights from the quarter. It's a pretty comprehensive slide, so bear with me. I want to be sure to hit each point. Beginning with a few remarks on how we've been navigating the COVID-19 pandemic, obviously, this is on top of everybody's mind, so I'll spend a couple minutes up front, and then we'll get into some more color and detail through the course of the presentation and Q&A. Clearly, our primary focus has been and remains the safety and well being of our people, 85% to 90% of whom continue to work from home, like most companies you've heard from working from home, can and does work, and we're no exception, of course. In our case, we have to balance that, if they need to be in the field, building and maintaining plant and installing and servicing customers. We're also governed by different local regulations and protocols in each country, most of which have required that we open up offices slowly and carefully, and that's exactly what we're doing. As we get back to normal, everyone in our sector is working on bottling the magic, so to speak, whether it's record customer satisfaction levels or faster, more agile ways of working, and I'm really excited about the progress we're making here, which I think is going to be definitely positive for us down the road. And while the macro environment in Europe has been severely challenged by COVID-19, the region on the whole has weathered the crisis pretty well and better than many expected.

As anticipated, Eurozone GDP fell 40% in the quarter and 12% sequentially, but there are some bright spots there, not the least of which is, by all accounts, a pretty effective handling of the pandemic. Nearly all of our core operating markets in Europe have successfully flattened the curve, with daily confirmed cases anywhere from 75% to 95% below peaks in March and April, and fingers crossed staying pretty constant. Just as impressive, while every death is tragic, mortality rates have fallen to levels at or near 0 in most of these countries. If you contrast that with the U.S., it's pretty striking. The crisis has also brought the region together. In addition to stimulus measures rolled out at the national level, the EU recently adopted a EUR750 billion recovery fund designed to help businesses rebound, reform those economies hardest hit and protect against future crises. It appears to us the confidence both among consumers and investors seems to be on the rise. You can see that in the euro's recent strengthen against the dollar by about 10% since mid-May. Against this backdrop, our business continues to perform well, very well, in fact, fueled by record NPS levels, lower churn, robust and reliable networks and significant steps to give customers more, more speed, more data, more content. And that's a theme I know you've heard from heard about from many of our peers. In our case, broadband net adds were the highest we've seen since Q3 2017 and customer additions, driven mainly by the U.K., with the best we delivered in over two years. And while COVID had a modest impact on reported revenue, and Charlie is going to dig into that in a bit, nearly all of that shortfall occurred in low or 0 margin line items, which allowed us to deliver better-than-anticipated EBITDA and operating free cash flow. The latter was up 14% year-over-year. Not surprisingly, we're reconfirming our original 2020 guidance. And quite frankly, we hope to exceed those levels. Switching gears, I'm pleased to report that our U.K. JV with Telefonica is off to a great start.

As we reviewed on our last call, this will be a transformational deal for the U.K., our respective customers and for shareholders. That's a win, win, win, as we like to say. Then after a couple of months of premerger planning, my excitement level for this combination is even higher. I'm not going to review all the details again. I'll just remind you that we're talking about GBP6.2 billion in synergies, a great valuation for Virgin Media going into the deal and expected proceeds to Liberty coming out of the deal of about GBP1.4 billion. I'll talk about fixed-mobile convergence in a moment on the next slide, but when you combine the U.K.'s fastest broadband network with the country's largest and most admired mobile company, the long-term value creation opportunity is extraordinary. It's also good to hear that the teams are working extremely well together. The financing is falling into place, and the regulatory process is under way. So everything is on track for the completion of this deal. Just a couple of additional points here on capital allocation. As we indicated on our last call, we definitely front-loaded our buyback activity into the first half of the year, which you would expect us to do, given the price volatility. That means we've already purchased around $750 million of stock in the last five months. To pre-empt the question, I know you're going to ask, we don't have any announcement today about adding to the buyback program. We're always reviewing those options, of course, but we have $250 million remaining on the plan. We'll be putting that to work for the time being. And then finally, our treasury teams were really active in the capital markets this year, refinancing over $10 billion of debt, extending our tenant over seven years and reducing our fully swap borrowing cost to 4%. So to recap, we delivered strong subscriber results, EBITDA and operating free cash flow are ahead of consensus, and we're confirming our original guidance for 2020. And then, of course, we're making great progress on the JV with Telefonica in the U.K. Speaking of the U.K., I thought it would make sense to revisit the fundamental logic underpinning this deal and the other fixed mobile combinations we've orchestrated recently.

This is a very clear and powerful strategy at work here. Since 2015, we've completed or announced five fixed mobile mergers with a total deal value of over $80 billion. And in each case, the fulcrum asset was our broadband network, built over the last two decades through organic growth and national consolidation. In certain of those transactions, we enabled the creation of a fixed mobile champion through the sale of our cable operations to a mobile-only player. That was the case, of course, for the sale of our Austrian business, the T-Mobile, for $2.2 billion or 11 times EBITDA in 2017, and the more recent sale of our German business, along with some smaller operations to Vodafone for $22 billion or 11.5 times EBITDA. These were highly accretive deals for us, right, where we were exiting at premium multiples and banking significant returns on our long-term tax-efficient investments in these markets. You've all seen the numbers. But by all accounts, these were also home run deals for Vodafone and Deutsche Telekom because whether you're a seller or a buyer, fixed-mobile convergence works. In fact, I think it's one of the most important strategic developments I've seen in Europe in my 30 years. It drives scale, it drives massive synergies, it drives sustainable cash flow, and ultimately, it drives better valuations, which is why in Belgium, Holland and the U.K., we chose to create our own fixed mobile champions by acquiring or combining with a mobile player in those markets, and the strategy is working brilliantly for us. Slide five provides some numbers to support that. On the top left, we highlight the scale of our combined operations today in these markets. In Belgium and Holland, we've surpassed the incumbent in fixed B2C services, and we're number one in broadband and TV. And in both cases, we're gaining share in mobile with convergence ratios exceeding 40% and growing.

In the U.K., we'll start the JV with the number one share in mobile and on footprint will be number two in TV and number one in broadband. We know that roughly 80% of Virgin customers are using someone else's mobile product today and are highly interested in a converged bundle from us. And as we continue to expand the reach of our gigabit broadband network, we'll reach more and more of two customers. Scale also drives strategic leverage and opportunity in these markets. What does it do? It enhances our ability to shape the political and regulatory agenda, which, you all know, is critical. And it puts us in a position to take advantage of ancillary opportunities in areas like content and new services and infrastructure. It's not surprising, and it shouldn't be that VodafoneZiggo was the first to launch 5G. It's also not surprising that VodafoneZiggo's success with fixed broadband is anchored by a one gig rollout and the strongest sports franchise in Holland. Telenet similarly acquired a food air channel and is now launching a new Belgian Netflix to supplement its OTT content offering. They also recently announced a project with the largest utility company in Flanders to own and control the network of the future. And the merger with O2 in the U.K. makes our previous expansion our network expansion strategies and infrastructure monetization ideas even more compelling, in my view. Second, as you've seen, synergies in fixed mobile transactions are a significant source of value creation. Just in the three deals where we remain directly involved, Belgium, Holland and the U.K. announced synergies totaling over EUR12 billion on an NPV basis. And as we've demonstrated again and again, these synergies are real, achievable and sustainable. In fact, we've never missed a synergy target. And in Belgium, we've exceeded expectations. And in Holland, we expect to do the same. This bodes really well for the U.K. and accrues to the benefit of shareholders, of course, but also the customers as we get smarter, faster and more responsive to their needs. Fixed mobile mergers also generate real growth, anchored by stable free cash flow. You can see that on the top right of the slide.

In the case of Belgium and Holland, we were able to turn around the EBITDA trajectory and, even more important, delivered significant distributable free cash flow of over EUR four billion. These results are derived from what are increasingly predictable outcomes, the realization of synergies, better customer experiences, reductions in churn, increases in NPS and the inevitable repair that occurs over the longer term when markets rationalize and consolidate. And lastly, investors, particularly in Europe, are assigning higher valuations to fixed mobile platforms. On the bottom right, we show you a half dozen examples, including companies like Swisscom and KPN and Tele2. You can add your own or take these off. It's up to you. But on average, these stocks are trading at eight times EBITDA with operating free cash flow multiples in the mid-teens and mid-single-digit levered free cash flow yield. So clearly, scale, synergies and stable free cash flow are desirable investment characteristics, especially when you're a national champion or national challenger. This underpins our prospective interest in public listings, to be frank, where it makes sense for us in certain instances to try to take advantage of these market valuations, partly because higher valuations and greater transparency and sustainable free cash flow should support our own valuation at the parent company, regardless of whether you look at us on a sum of the parts basis where you use proportionate EBITDA or operating free cash flow or if you focus on levered free cash and the annual dividend streams we collect from these high-margin operating assets. Speaking of operations, we have our usual updates for each operating company in the presentation for your information. But in the interest of time, I'm just going to hit a few high points here from each market, and then we can address any questions or thoughts you might have during the Q&A. I'll start with Virgin Media, which by all accounts, had a strong quarter with 24,000 fixed customer additions, including growth on both the Lightning and BAU footprint.

These results were supported in part by a reduction in churn and 33,000 broadband adds, which we estimate to be 75% of all broadband adds in the U.K. Its customer ARPU was impacted by COVID, particularly pausing on the premium sports, but on a normalized basis, ARPU was flat. We added 93,000 homes to the Lightning footprint in the quarter, bringing our cumulative build to 2.3 million and total gigabit ready homes in the market to 15 million. Nobody has a faster or more robust network than Virgin Media, it's not even close. And Virgin had another strong quarter on mobile with 85,000 postpaid adds on the back of their Oomph quad-play bundles, adding three points to the fixed mobile ratio. Lutz and the team, I think, are really starting to hit on all cylinders, and that sets us up really well, leading into the merger with O2. The Swiss market remains highly competitive, by the way, and you know that, which is why we've invested last year in a nationwide one gig rollout and our new video platform and digital initiatives across the customer operation. Good news is these investments are beginning to pay off, with commercial momentum building in Q2 and operational trends improving. For example, NPS is at an all-time high, and sales in June actually exceeded both last year and pre-COVID levels. We also announced an agreement with Swisscom that rationalizes sports in the market and ensures that each of our customers will have access to both Teleclub and MySports going forward. As you've heard us say many times, we're particularly focused on free cash flow in this market, and you'll see that operating free cash flow was up 10% in the quarter, which supports our full year forecast of $170 million of levered free cash flow. Strategically, what can I say, we remain opportunistic. You'd expect me to say that, this market still requires rationalization. By the way, we don't think the announcement by Sunrise and Salt to jointly build some fiber over the next five to seven years, if they can get the financing to do that, changes much of anything, really.

We already reached 75% of the country with gigabit speed, so the competition had to articulate some sort of plan, which is what we think that adds up to. Moving to Telenet. They had a strong quarter on a number of levels, with their best broadband and digital TV net adds since 2015. Customer ARPUs rose 2.4% year-over-year. That was supported by a higher proportion of fast broadband and quad-play subs. Speaking of quad-play, the fixed mobile BASE now stands at 600,000, and the total convergence ratio or mobile attach rate exceeds 40% in Belgium. While there was a revenue impact from COVID, particularly handset sales and advertising, underneath it all, you'll see that subscription revenues are growing and above target. That's a good thing. Not surprisingly, Telenet confirmed the 2020 guidance they gave in April, and it stuck to its original free cash flow and dividend forecast for the full year. Then finally, VodafoneZiggo also performed well through the pandemic. The investment in networks and infrastructure continues with nationwide 5G coverage now available and new 20-year spectrum license just acquired a few weeks ago. The rollout of one gig is also back on track, with nationwide coverage slated for the end of 2021. Our VodafoneZiggo's results in the second quarter were solid. The team managed to mitigate the revenue impact of COVID in the mobile space, mostly roaming related, with 6% ARPU growth in the fixed business and proactive cost controls, which drove normalized Q2 EBITDA up 6%. So as a result, VodafoneZiggo also reiterated their full year guidance, including positive EBITDA growth and $400 million to $500 million of free cash flow available for distributions to shareholders. Now before I hand it back to Charlie to talk through the financials, I just want to take a moment to switch gears here and recognize the passing of one of our Board members, a dear friend and mentor to me, J.C. Sparkman. You might have seen his obituary in the Wall Street Journal. I'd just say J.C. was a legend in the cable industry. In John Malone's words, TCI was built on J.C.'s back over the 25 years that he was Chief Operating Officer. And he brought that same energy and operating wisdom to our Board over the last 15 years, while he was part of the Liberty Global family. He will be sadly missed by all of us. I don't want to end on a sad note, but I just want to be able to make sure I have a moment to recognize him and his great contributions to our company over the last 15 years.

With that, Charlie, over to you.

Charlie Bracken -- Executive Vice President and Chief Financial Officer

Thank you, Mike. I'm on the slide entitled Q2 impact of COVID-19. Overall, of our 4.3% Q2 consolidated year-on-year revenue decline, we estimate that the COVID impact is roughly 4% or around $110 million. Within that, we estimate that the reduced revenues from premium sports accounted for $34 million and increased late charges around $8 million. B2B fixed and mobile impacts were around $19 million, and reduced mobile roaming and reduced handset sales contributed $17 million and $10 million, respectively. We also saw reduced revenues at our Irish and Belgium broadcast businesses, which we estimate at $21 million. So when you consider the estimates of the COVID impacts, the revenue trend is actually in line with recent quarters. We estimate that the overall impact of COVID on adjusted EBITDA in the quarter was minimal. Many of the impacts, such as premium sports and mobile handset revenues, are low margin. And we also benefited from reduced churn and lower sales and marketing expenses, which helped to offset more material impacts. As a result, we believe that our Q2 adjusted EBITDA growth rate was in the aggregate largely unaffected by COVID. On the next slide entitled Group Overview, we show the key financials for the group. Despite the revenue decline of 4.3%, adjusted EBITDA declined 0.4% for the quarter versus a decline of 3.6% in Q1. Property and equipment additions were 21.6% of sales in Q2, and without the impact of Lightning, we're 18.8% of sales. As a result, we saw strong operating free cash flow growth with pre-Lightning construction OFCF for the quarter at $678 million, a 12% year-on-year improvement and after Lightning capex, $601 million, up 18.3% year-on-year.

Group liquidity remained strong at $9.8 billion. And at quarter end, our gross debt was 5.3 times adjusted EBITDA and 3.8 times net. Having completed a number of refinancings in Q2, our average debt tenor remains beyond seven years, with an average cost of 4%. On the page entitled P&E Additions, we provide more detail around our capex, which we continue to analyze in five major buckets. COVID did have an impact on our CPE spend, which was down 34% year-on-year. However, with the upgrade of our set-top box and Connect Box sustained, we expect to see a reduction in spend in this category, even without the impact of COVID. Despite COVID, we continue to invest in the other capex categories and layed the platform for future growth. Project Lightning build volumes were down modestly year-on-year, but we still constructed 93,000 homes in the quarter. Cost per premise trended down with a cost per premise of GBP626 in the quarter versus GBP665 cost per home across the project to date. Capacity investment was down 18%, as we benefited from the completion of the large spectrum upgrade in Belgium and much of the one gig upgrade in the U.K. We increased our spend in the product roadmap, 18%, supporting our mobile platforms in the U.K. and Belgium as well as the IT investments required to drive digitization efficiencies. Baseline, which is our major platform maintenance category, was broadly in line with previous years. In the aggregate, we spent $1.2 billion in the first half of the year, or around 22.2% of sales. Without the Lighting construction capex, this figure would have been 19.1% of sales. And with the completion of significant projects in the Connect and Video space as well as the major capacity and IT upgrades behind us, we expect that our capital intensity, excluding Lightning, to remain below 20% and trend lower in the coming years. Turning to the divisional overview, which breaks down the figures by our key major subsidiaries and provides a roadmap to analyze the free cash flow of our major assets. The U.K. and Ireland saw a revenue decline in the first half of 2.1%. Adjusted EBITDA declined 2.5%, and OFCF was strong at $749 million before Lightning construction capex and $573 million after.

Underlying that remains a strong cash flow generating asset, despite our new build investment. It also benefits from significant tax loss carryforwards, meaning a higher free cash flow conversion on its OFCF than, for example, Belgium. In line with the group as a whole, Belgium revenue in the first half declined 2.8%, but reported positive adjusted EBITDA growth of 2.2% and operating free cash flow of $428 million. They recently confirmed their free cash flow guidance at the low end of the EUR415 million to EUR435 million. As Mike discussed, the repricing in the Swiss market continues to put pressure on the top line. And despite operating efficiencies, adjusted EBITDA declined 12.9% in the first half. OFCF for the period was $140 million, and we remain confident that for the full year, they'll realize around $170 million of attributable free cash flow at today's exchange rate. As Mike highlighted, the standout perform of our major assets was VodafoneZiggo. Despite COVID in the first half, they reported 2.6% revenue growth, 8.1% adjusted EBITDA growth and increased OFCF to $562 million. Turning to the adjusted free cash flow for the group as a whole. After the first six months, operating free cash flow before Lightning capex was just under $1.3 billion. We had half year interest of $600 million and cash tax of $57 million. The joint venture paid interest on the shareholder loan of $22 million for the first six months, and we expect the remainder of our 50% of their EUR400 million to EUR500 million projected shareholder distributions in the second half of the year. Working capital for the first half was negative $323 million, consistent with previous years, and we expect the working capital impacts to be broadly flat for the full year. As a result, adjusted free cash flow before Lightning capex was $315 million, and after capex $139 million. We remain confident, subject to no major further disruptions from COVID, of realizing our full year free cash flow target of $1 billion, even after Lightning construction capex. So in conclusion, the U.K. JV with Telefonica remains on track. We're continuing to navigate through COVID-19, where, so far, the impacts have been manageable. And despite COVID, we were able to achieve record high NPS in Q2 and positive customer additions. We're encouraged by our first half financials and actually are optimistic for the remainder of the year. We are confirming all of our 2020 guidance metrics based on no return to the full lockdowns that we saw between March and May and assuming a gradual economic recovery.

Given the uncertainty of this backdrop, we're not raising our guidance at this time, and we'll take questions now.

Questions and Answers:

Operator

[Operator Instructions] And we'll go first to Steve Malcolm with Redburn.

Steve Malcolm -- Redburn -- Analyst

Can you hear me guys?

Mike Fries -- Chief Executive Officer and Vice Chairman

Got you.

Steve Malcolm -- Redburn -- Analyst

Sure. Yes, sir. So thanks for the presentation. Just coming back to slide five on your multiples. I guess, the Telenet multiple kind of jumps out a bit, trading at north of 10% free cash yield. I mean, just really a question for you and the Board, Mike and Charlie. I mean, are you it seems like you're not getting tremendous equity value from that stake in Telenet and the VodafoneZiggo stake. Why do you think that is? And is the Board happy with the status quo? I saw your quotes in a recent sell-side conference, and you'd love to own more of VodafoneZiggo. Just sort of interesting to hear your thoughts on why you think the stock market is not giving you what you clearly think is fair value for your stakes in those Benelux assets and what you can do to sort that out.

Mike Fries -- Chief Executive Officer and Vice Chairman

Sure, and that was really the point of that slide was to talk about the FMC strategy, but the punchline being that we believe, if we continue along this path, which we are, of course, continuing on, that the valuation, at least in the underlying businesses in those local markets, will be there. And I think you raised Telenet, that's a good example, traded at a premium to us on a number of levels. Are we getting that valuation in our stock? But I think it begins with the underlying businesses. And I think the path we're on to drive the FMC champions to greater free cash flow yield, greater stability and operating performance is the starting point. And it's clear also that local investors in many of these markets prefer to own these businesses and understand the benefits of stable and sustainable free cash flow. And as a result, as you can see on the page, they are giving these businesses higher multiples and better valuation. So if we're able to achieve those same results, and the results we've already been achieving, and we can get, for example, VodafoneZiggo public, or perhaps even O2 U.K. someday, Virgin Media in the U.K. someday, that could be a real positive event for the stock.

I'm not saying that's the only reason to look at it, and it's not explaining the entire gap that we have today between underlying value and the top co, but it certainly will help bridge that gap. And we're all about, as I've talked many times, bridging that value gap, and I think that the strategy we're pursuing here is the right one. And investors need to see a few things, and it wouldn't be surprising. They want to see these transactions get done. So we need to get the transaction with Telefonica and the U.K. completed and approved. And of course, that will be a positive, when it is. We need to continue to show and demonstrate the sort of strong performance in cash flow that we're demonstrating out of these businesses today. No question, we have to put some of that money to work. I think the money on our balance sheet isn't helping today for some investors. I'd like to see that money be put to work, and we appreciate that. We're in the same boat. We wanted to put money to work. There's a combination of things. But hopefully, the slide shows that the path we're on is the right path for creating long-term valuation. And that's where we're sorry, Charlie.

Charlie Bracken -- Executive Vice President and Chief Financial Officer

So I just also add Mike, it's Charlie. Just it seems I think we do feel this time it's pretty undervalued. I think that it's not clear to us why it would trade so distant to KPN Proximus, which have less attractive growth profiles, less stability in their cash flows, etc. And that's why we're certainly working with Erik and John on because I think there's a number of possible technical reasons around the liquidity of the stock and/or could it be around clarity around shareholder distributions, the balance between buybacks and dividends. So I wouldn't say that we feel comfortable with the value of Telenet. We can get to more...

Steve Malcolm -- Redburn -- Analyst

Right. Charlie, that was really my question yes, so that was really my question, but it doesn't seem like the current structure where you own 60% of Telenet and 50% of VodafoneZiggo is doing a great deal, either for I mean, you mentioned local listings, but it's not really working with Telenet at the moment. And I guess, if that's where Telenet trades and VodafoneZiggo arguably trades below that, despite really good numbers this quarter. So that was really my question as to whether you think the current setup work.

Charlie Bracken -- Executive Vice President and Chief Financial Officer

Well, I actually I think what I'd like, Steve yes, Steve, I think we can make you the case that VodafoneZiggo has superior growth to actually any telco in Europe, so they would trade substantially. They've just beaten KPN on every single metric. So I think it's fair to say that the valuation of them, we would expect to be in size of KPN, not the other way around, particularly with the synergies they had. I think the Telenet valuation is a head scratch, yes, and we're certainly aware of the disconnect. And we're talking a lot with them about it. But it's fundamentally a very strong company, very predictable cash flows. And I think, at this stage, for whatever reason, isn't giving the valuation. But to echo Mike's point, even at that valuation, we're trading at a discount to that is our point.

Steve Malcolm -- Redburn -- Analyst

Yes. But I guess, unusually, I'm agreeing with you. Just trying to figure out whether there's a better structure out there that would close that. And it's undervalued within you and then it's the local listing itself is clearly at a big discount to companies like Tele2, but I think it's probably performing better than at the moment. Anyway, yes, that's it probably for me. I'll probably just ask my questions...

Mike Fries -- Chief Executive Officer and Vice Chairman

Yes. And we're a bit more leveraged yes. We're a bit more leveraged than some of the stocks on this page, of course, at Telenet and VodafoneZiggo. But I think the answer is the same, which is fundamentally Telenet might be undervalued. We're clearly undervalued, but the strategy of creating transparent value has to do a good thing over time based on where we...

Steve Malcolm -- Redburn -- Analyst

Thanks a lot.

Mike Fries -- Chief Executive Officer and Vice Chairman

All right. Operator, next question.

Operator

You got it. We go next to David Wright with Bank of America.

David Wright -- Bank of America -- Analyst

Yes, Hi guys. Thank you very much for taking questions. Just on the U.K. trends, obviously, strong Internet adds, cable adds. You guys committed to maintaining quite a lot of the provisioning through the lockdown period, which will surely supported the trend. But it still does stand out as a much better commercial performance. Could you maybe just add a little color on what you think is driving that? Was it perhaps that the U.K. consumers reacted a little bit less than you thought to the end of contract regulation? What is it you think has really driven that market outperformance?

Mike Fries -- Chief Executive Officer and Vice Chairman

I'll just say a couple of things, and then Lutz, I'll let you chime in here. From my perspective, the fact that we were still installing customers actively in the field certainly advantaged us. We didn't stop installations. We felt that, that was critical and central and continued to make products and services available to consumers, which was important. And then secondly, at times like this, there is usually a flight to quality. And when we're offering 500 meg across the country and the competition is a 30 or 50 or maybe 100, in some cases, or slightly more, that certainly matters. Those two things, in my mind, resulted in certainly better performance than we'd expected together with reduced churn, and you saw the numbers. So Lutz, do you want to add to that?

Lutz Schuler -- Chief Executive Officer of Virgin Media

Yes. And I think exactly what you said, Mike. I mean, what we did was we came up right at the beginning of the crisis with the generosity program for our customers. So offer them more speed, offer them mobile data packages, offer to remove any caps on voice, came up with free of charge broadcasting channel for kids and stuff like that. And so NPS has increased rapidly, so that's number one. Number two is, I mean, employee satisfaction also is increasing since quite some time, and our field people stayed committed to the company. And so they've decided to keep installing and keep expanding that or so, which was also a great contribution to the success. Thirdly, we quickly moved to digital, right? I mean, we started a journey to digitalize media. And now our sales channel our digital sales channel has increased by 50% from Q1 to Q2. So the sales general percentage of digital has increased to 68%. And on the churn side, then, high NPS leads to lower churn. Then also, obviously, Openreach, they have stopped installing. So therefore, you could not really churn to another network. And but also, you'd see that our quarterly churn has gone down over three consecutive quarters in a row. So therefore, we have set momentum. We have momentum in lower churn, and we have higher NPS. And also, as Mike said, higher speed and higher quality matters when the connectivity is the connection to the outside world.

David Wright -- Bank of America -- Analyst

And could I possibly add then? We know that Openreach was back in the market in June with a lot more installations, almost bucket kind of full run rate. Can you kind of give us any indication of the sort of inter intra sort of quarter trends and whether you're kind of exiting the quarter maybe a little bit more normally rather than that kind of initial spike? Was the real outperformance sort of through April, May and June maybe a little bit more muted?

Lutz Schuler -- Chief Executive Officer of Virgin Media

So from the sales perspective, we actually accelerate momentum, so we have not felt that our competitors are back in the market. From the churn, you see I mean, we have been, I think, May and April on our churn numbers, right, I mean, they were dramatically low. The churn level has come up a bit more, but it's still lower than it used to be.

David Wright -- Bank of America -- Analyst

Okay. Very interesting. Thank you.

Operator

We'll go next to James Ratcliffe with Evercore ISI.

James Ratcliffe -- Evercore ISI -- Analyst

All right, Thanks for taking the question. Two, if I could. One is a big picture one, a lot of discussion on fixed-mobile convergence and the rationale to go for the U.K. transaction. Can you talk about what the pitch to the customer, what the compelling proposition for the customer is on fixed-mobile convergence beyond just maybe you get a bundle discount? And secondly, clear commentary about customers dropping sports packages in the wake of COVID and the lack of sports and, I mean, that they're low margin. But aren't sports a big part of the reason people take pay TV? So can you talk about the longer-term impact of lack of sports? And secondly, how profitable is the TV business for you at this point? I mean, U.S. suffered and has indeed pretty much thrown in the towel on it. But how beyond does the trend reduce? Or how liquid is the TV product itself?

Mike Fries -- Chief Executive Officer and Vice Chairman

Quite a few questions there, James. Let's see, Lutz, you can work up what we're doing with the [Indecipherable] trend in the U.K. and at least give one example of a fixed mobile proposition to consumers today and how that might evolve in an O2 environment. I'll say on the TV business, of course, we evaluate this very closely across every marketplace. We still deliver and generate pretty good gross margins on our TV business in comparison to, say, the U.S. industry, and that's principally because we don't have massive expense in the basic package for sports. And so our gross margins vary by market, but they could be as high as 60%, 75% in our TV business. That's, from our point of view, a nice piece a nice contribution to the EBITDA and something quite important to us. And we don't intend to sort of let it go, if you will, as you think you implied. We do realize, though, that the overall economics of TV have to evolve and are evolving, and so what we're spending quite a bit of time on is reducing the cost of our the device we put in the home, ensuring that things like sports are available on a premium basis and integrating OTT apps, so that your experience is seamless. So that when you turn the TV on, you just say, "Play Netflix, play Amazon, play BBC," and you're ready to rock and roll. And so we do think the entertainment platform we've developed has longevity and has relevance to consumers because we're integrating apps, because it's cheaper spend and easy to utilize, and we intend to continue to drive the cost of that down.

So there is margin in the TV business and there is profitability in the TV business. And from a sports point of view, yes, when sports paused, we did lose a handful of customers, but most customers just paused. And fortunately, for us, whatever money we lost from sports customers pausing, we ended up getting reimbursed essentially and not having to pay those costs back to our providers. So it was largely a wash for us, a 0 margin wash. The last point I'll make is that we know, because we've researched this, that the entertainment component of the bundle matters to broadband customers. Vast majority of broadband customers want to see a TV product in the bundle, and that is hugely impactful for their purchase decision. So you can't just eliminate the entertainment product, and we wouldn't do that anyway, a big part of our revenue and contribute to EBITDA. But on the other hand, just to point out that it is still a highly relevant part of the bundle for consumers across Europe, who watch a lot of free-to-air television still and who are embracing OTT apps but, thankfully, embracing them on our platform. So Lutz, do you want to talk about these bundles in the U.K. and how you see that evolving with those O2?

Lutz Schuler -- Chief Executive Officer of Virgin Media

Yes, yes. I think it's not only a discount, which brings the customer to buy a fixed-mobile converged product. I think it's a combination of benefits. But what we have done with Oomph is we are offering consumers higher speed. Actually, now they are going to get 600 mbits when they get the highest Oomph package. So speed, they don't get results there, the higher mobile data package, so two gigs instead of one or 10 gig instead of five, such like that. And then also, a special customer service hotline where they have great support. And this combination, I think, creates then a strong momentum. And for some customers, fixed speed is more important for them. It's similar package. For them, it's a combination with a great plus. And so it's much more than a discount. I mean, the discounts have been in place since year, but the fixed-mobile converged customer base has not increased the last I think from 2016 to 2019. And then when we came up with Oomph, now it's having really six times, and we have now increased three percentage points. Now when you take that to O2, I mean, that typically provides a huge opportunity because 80% of O2 customers do have different fixed broadband provider than Virgin Media. 2/3 of them, we have made some market research, are actually interested in such a converge only we've just talked about. And the brands are very close, and they would prefer a product like Virgin Media. So therefore, now it's all about understanding different segments and then coming up with the right product combination and then offering that. And this is then I think the tailwind for the revenue synergies in the case.

Mike Fries -- Chief Executive Officer and Vice Chairman

You can see it. If you were to study the VodafoneZiggo results in the second quarter, but on almost every metric, we've outperformed KPN. And that's because we're finding the rhythm that matters to consumers in that fixed mobile space, and that it is speed. It is not just reducing cost. It's giving people more. Sometimes it's more for the same, more for more, maybe even more for less, depending on the combination. More matters, and that's exactly what fixed-mobile convergence delivers. So...

James Ratcliffe -- Evercore ISI -- Analyst

Thank you.

Operator

We'll go next to Robert Grindle with Deutsche Bank.

Robert Grindle -- Deutsche Bank -- Analyst

Yes. Hi there. Going back to the U.K., you seemed to have played lockdown very well indeed and perhaps benefited by some of your peers not playing so well. But last week, Ofcom reckons that more than 60% of your broadband customers are out of contract, so that number have been moving up quite a lot recently. And do you intend to address this perhaps in H2 within the constructs of your guidance?

Mike Fries -- Chief Executive Officer and Vice Chairman

Lutz, do you want to tackle that?

Lutz Schuler -- Chief Executive Officer of Virgin Media

Yes, yes. So we have talked about end of contract notification, I think, in the previous quarterly call. And I can confirm the message I've given there. So actually, the impact of end-of-contract notification is less than we have planned for. So what does that mean? That means that customers are simply less challenging to get additional discounts to stay, as we have planned for. So I think that's number one. I think number two is that we think that speed matters more than ever, right? I mean, when you have four, five household members, Mom and Dad are doing video calls, the kids are playing or on video stream, you need speed, and you need to have reliable speed. And therefore, our average speed in U.K. is two and half times higher than the average. And we are working on increasing that delta, right? And therefore, we think that our customers, if they perceive value for money, that we are actually not so concerned about that 60% of our customers are not in contract. And we don't think that we should overwhelm them with big discounts to stay. And if you look at our NPS numbers, they are improving. And our churn numbers, we are on the right path here.

Mike Fries -- Chief Executive Officer and Vice Chairman

I would say, when we the end-of-contract notification period began before COVID really hit. Then it was largely paused by most in the industry. And but during the period of time that it was active, as Lutz said, we saw the churn was maybe more or less what we expected. But the discount required to keep customers was also significantly less. And so, at least in the short period of time we had pre-COVID, the end-of-contract impact, at least for our business, was less than we expected. We've only more recently, we've gotten back to engaging with customers on this, and we'll let you know when we get to our third quarter results. But so far, so good.

Lutz Schuler -- Chief Executive Officer of Virgin Media

Yes. We have been 10 days offline. And obviously, also to support what Mike said, right, and also a bit in regards to our guidance, there is no average first half notification coming, and we will talk with that in the fall. And obviously, we are careful in our planning as we have seen this end-of-contract notification, but we will see it at the end of the quarter for that.

Robert Grindle -- Deutsche Bank -- Analyst

Okay.

Mike Fries -- Chief Executive Officer and Vice Chairman

Yes. Operator?

Operator

And we'll take our next question from Nick Lyall with SocGen.

Nick Lyall -- SocGen -- Analyst

Hello. It was a call on a question, sorry, on Switzerland, if that's OK, Mike. I mean, you mentioned in the release that Horizons has now quite [Indecipherable] so as gigabit convergence is coming up. And also you've got the Swisscom sports deal on the way. But the EBITDA is still down about 11% ex the one-off. So could you just try and weigh up between the you're obviously making some operational changes to the business, but how long before you can start to think about stabilizing revenue and EBITDA, if at all? It still seems quite a long way away.

Mike Fries -- Chief Executive Officer and Vice Chairman

Sure. Listen, the turnaround plan remains as it's been described in terms of our tactics and our strategies. So it's all about one gig, getting the TV box to EOS penetration maximized, trying to retain some of the record NPS that we've been delivering and driving the fixed-mobile convergence, which has been a steady success story for us every quarter. And then lastly, keeping ensuring that our customer operations continue to be smooth, and the digital transformation process also there is working quite well. So there's a lot of positive things happening. Having said that, as I mentioned, the market is competitive. We have to stay competitive, which means we have to be thoughtful on price and offers and packages. And I think as we didn't really provide anybody, I don't believe, specific details as to when we would be breakeven EBITDA, when we'll be back to growth. We continue to evaluate that time frame, of course, and I don't know that we've made that public. And I'm not sure if we will at this point, except to say that we still feel very positive about the plan. Even if the plan were to take a bit longer, we're in this for the long term. The plan itself is solid and sound, and it looks to us like it's working. I don't know if that piece is on it. Do you want to add anything to that, that piece around recent momentum, what you're currently seeing on the ground. Go ahead.

Baptiest Coopmans -- Chief Executive Officer of UPC Switzerland

Yes, this is Baptiest. I think it's like what Mike says, it continues to be a very competitive market, but we're building commercial momentum. And Lutz was saying that he saw growth in the quarter, and the same we can say for Switzerland. So June was better than May, and May was better than April in terms of sales. And I would like to point out that Switzerland is past the point of all the investments. If you look at the operational free cash flow margin back to 28% in the second quarter, that's not an incident. So we are past the investments of the one gig network, the new video platform. We've now taken the opportunities to really simplify the business. So this continues to be a very strong cash-generative platform. There is sales momentum coming now.

Nick Lyall -- SocGen -- Analyst

Okay, thank you.

Operator

We'll go next to Matthew Harrigan with Benchmark Capital.

Matthew Harrigan -- Benchmark Capital -- Analyst

Well, thank you. Your industry association, ECTA, and a number of consultancies have really pointed out that a lot of the innovation and investment in your network is really just kind of translated the free-rider effect almost for guys, like Facebook and Google. Now you've had even more acceleration going forward maybe five years ago on some broadband businesses. You've got 5G in the offing. You've got even more value on your network now with some of the latency issues between DOCSIS, 5G, LTE being addressed. Is there any possibility that you could capture a nice chunk of that and accelerate to grow over time? And I know, right now, when you look at the COVID numbers, you're kind of looking at layers and some of your revenues have been hurt, your costs have been hurt. And at the same time, your cost structure following through with some of the things you've been forced to do, but your revenues probably grow a little bit faster longer term. But can you kind of layer that out and just talk how you feel as if the character of your business has changed off COVID and then the fixed-mobile convergence and, hopefully, getting more of the benefit of that network owners as opposed to people who are using the network of other companies? Mike, a little long-winded, I apologize.

Mike Fries -- Chief Executive Officer and Vice Chairman

Matt, I just want to be sure I follow the question. It sounds like you're asking a couple of things there. I mean, our network strategy, which they can jump in here and talk about, shows us continuing to drive speeds from one gig to 10 gig over time. So there's no the strategy is clear, whether it's through DOCSIS 4.0, whether it's through fiber to the home. By the way, half the phones we built in Lighting, the fiber to the home build, we're going to continue to lead wherever we can, the speed race, and that matters considerably to consumers. With mobile and with fixed-mobile convergence, the same can be said on the wireless side. So 5G and one gig were a powerful combination. 5G and 10-gig even more powerful. But 5G and one gig is sort of the killer app. And if you look across the markets we operate in, we're the only ones really providing those options today. And in the U.K., once we get the deal with O2 close, we'll provide that option there as well since they've launched, I think, the rate. It's the growth over the long term is not an accident.

I'm not so it's certainly something that's quite deliberate and purposeful and driven by all the things we described. On the cost side, you've got lower costs, you've got synergies. On the revenue side, you've got less churn, you've got higher NPS. And you continue to innovate on the network and in the bundles and the products. And the consumers have shown everywhere we operate that you cannot just drive sustainable EBITDA growth, which matters, but also and, just as importantly, significant free cash flow margins and free cash flow, and that is where we're headed, which is ensuring that all these operations are able to deliver sustainable, high-margin free cash flow. And whether we dividend that to us to ourselves, we're taking those assets public and looking at market values, we know that there's an opportunity to capitalize on this infrastructure and these retail relationships in a way that we haven't done historically. So that is the basic strategy. I'm not sure if I've addressed your specific questions.

Matthew Harrigan -- Benchmark Capital -- Analyst

Yes. I think to describe it more succinct way to frame it, what it has been, given that increased facility, your network and use, do you think you're going to be able to raise your pricing more than you have historically? Because I mean, the value of your network has increased and your people are thinking outside companies are really benefiting in your network. I mean, do you think it just translates to better pricing power over a period of time?

Lutz Schuler -- Chief Executive Officer of Virgin Media

Can I help here, Mike?

Mike Fries -- Chief Executive Officer and Vice Chairman

Yes. Sure. Go ahead.

Lutz Schuler -- Chief Executive Officer of Virgin Media

Just one idea, right? I think our strategy shows us that we are combining four products now, right? So we are combining fixed mobile, voice, mobile broadband and video. And the video product is getting more and more OTT products. What we are doing is, with the help of data, we understand our customer in a perfect way. With the help of digital, we really offer a combination for all these customers, all these at the right level. And therefore, then, we are creating a high stickiness of our customers. Going forward, therefore, when we are successful with that, we can also sell other stuff, and this will give us will bring us in the position, when we are successful with that, to also increase our margin and our pricing, right? And there are operators who have done that successfully. And when you think about quad play plan and you think about that, there's an opportunity to step there. But I think the first step is that we are able to offer quad play in a perfect way to all our customers. And this is the FMC step. I don't know if that helps.

Matthew Harrigan -- Benchmark Capital -- Analyst

Thanks, Mike. Thanks a lot.

Mike Fries -- Chief Executive Officer and Vice Chairman

Okay. Operator we have time for one more.

Operator

I know that, sir. Yes. Over next maybe couple more in the queue. We'll go next to Christian Fangmann with HSBC.

Christian Fangmann -- HSBC -- Analyst

Yes, hi guys, thanks for the question. Coming back to the to Switzerland, I mean it's, I would say, the weak spot in overall pretty good results. And you mentioned that, Mike, earlier, around Switzerland and Salt's joining for Sunrise on the fiber to the home front. What are your strategic options in Switzerland down the road? I mean, the deal last year failed, so would be interested in your thoughts there. And then a bit of a follow-up to Baptiest's point, what are we seeing in terms of market aggressiveness, ARPU? And I've seen that B2B is also now going backwards. So what are the trends that you are foreseeing, roughly speaking, for the second half? Is it as bad as in H1? Or can it be better because of lower investments?

Mike Fries -- Chief Executive Officer and Vice Chairman

Okay. Baptiest, you can work up an answer on the second one. On the first one, the strategic options remain the same ones that we've always articulated, and I'm not going to get into speculating which of these make the most sense. But clearly, as I mentioned in my remarks, we think the market would benefit from rationalization. We are trying to do our part in that. Of course, a very small part, we achieved in the second quarter with the announcement of the sports deal with Swisscom, wouldn't underestimate that, I think that's going to have a major impact over the long haul, both on our own investments in our sports product as well as our consumers, the benefit to our consumers of having access typical access to both sports products. We have a strong MVNO agreement with Swisscom, a very rational MVNO agreement with them that gives us great pricing. In fact, they reduced pricing further in this latest agreement. And so many of the operators in the marketplace, us and Swisscom, in particular, are starting to make decisions and work in a manner that we think heals the marketplace. As I mentioned on the Swiss fiber announcement, if you parse through that and you break it down, we're reaching already 70%, 75% of the homes with a 1-gig product.

They hope to build 1.5 million out of about four million homes in five to seven years if they can get the financing to do that, and that makes sense to us. If I were in their shoes, I would certainly look at something like that. They see the infrastructure capital sloshing around. They figure one that to us, and let's try to put something to work that relies that makes our reliance on Swisscom less. And I appreciate that strategic decision, those things will take time and will be expensive. And let's see what the ultimate market situation looks like in five to seven years. In the meantime, we just keep our heads down and push the benefits of our network and our products, which are pretty strong. And I think it's I'm not going to give you guidance here on when the numbers start to continue to look better on the financial front. But you can see that customer adds, certainly better than the last two quarters or same as last quarter, better than the quarter prior to that. And market improvement here is going to take a little bit more time than we probably thought. But the trajectory looks good, and we're still confident. And the number one thing here is to drive free cash flow. Put whatever yield you want from the $170 million of free cash flow, there's meaningful equity value in this business. We continue to drive free cash flow. That's the metric that matters in this particular instance. Baptiest, do you want to provide some color on the ARPU and B2B business?

Baptiest Coopmans -- Chief Executive Officer of UPC Switzerland

No, no. I think the free cash flow of this quarter confirms the $170 million going forward and that's intrinsically in this business. Secondly, the top line of Switzerland has these low-margin COVID impacts that Charlie explained. If you look under the hoops, the B2B business continues to grow. So the core B2B business still grows 2%, if you take out the low-margin impact of COVID. In the consumer business, we deliberately look at broadband lines. That trend starts to improve. We found our way in new advertising. We found our way with better distribution. We found our way in the promotional price points. And I just would like to reiterate the exit run rate of the quarter is good. And NPS, the Net Promoter Score, has never been as high as we can go back for what you'd see in Switzerland. So the momentum is there. It's a matter of time now, but from a stable free cash flow platform.

Christian Fangmann -- HSBC -- Analyst

All right, thanks guys.

Operator

We'll take our last question from James Ratzer with New Street Research.

James Ratzer -- New Street Research -- Analyst

Yes, thank you very much indeed. Two questions, please. Just coming back to the U.K. The first one is kind of bigger picture one around your strategy. I mean, I was wondering if you are kind of pivoting the strategy now to becoming a little bit more price competitive. I mean, I've seen that you've been sending letters out saying no price rises this year and you've extended your introductory offer period from 12 to 18 months, both of which would seem to be making you more price competitive versus the competition. So I was wondering if this is a little bit of a pivot in strategy to help support KPIs. And then the second question I had really was just trying to quantify the impact of end-of-contract notification and the best tariff notification as well. I mean, you're saying, excluding sports, ARPU in the quarter seem to fall from about 1.2% growth to being flat. How much of that is actually driven by end of contract and best tariffs? What percentage of your customer base now actually have had these notifications? This I mean you're telling us it's landing in line with expectations. Maybe you could steer us toward what you think that impact will be when it's worked its way fully through the base, that would be great.

Mike Fries -- Chief Executive Officer and Vice Chairman

James, I don't think we provided any guidance, specific monetary guidance on end of contract. At the beginning of the year, we said in our original guidance that there's about GBP100 million of headwinds, which included end of contract and annual best tariffs as well as rate network taxes and things of that nature. So I don't think we've broken that down into components. And what we said is that the end of contract experience prior to COVID was better than expected, not as expected, in a sense that the churn numbers were largely what we expected them to be. But the amount of discount we had to offer to achieve those levels was less. And I think we've only got it's only been a very short period of time that we've reactivated the end of contracts, so not much color to give you there. But third quarter, when we get back on the phone in November, we'll certainly have a longer track record to give you a sense of how things are moving. And Lutz, you can dig in on the price increase, which, as you correctly say, has been postponed here. And I think that makes total sense in the environment that we're in, taking into consideration this uncertain time for customers, it seems to from our point of view, a very appropriate thing to do. But Lutz has a great plan, which we've just approved to go ahead and actually neutralize the impact of that price increase not occurring in the fourth quarter through greater volume growth. So you can talk about that quickly, Lutz.

Lutz Schuler -- Chief Executive Officer of Virgin Media

Yes. So first, the ARPU question. The development of the ARPU from Q2 2018 until Q2 2019, right, so exactly a year ago, was an ARPU growth of 0.5%. Now if you now look at the ARPU development and you exclude the COVID impact, we have an ARPU growth of 0.1%, so the delta between the two years is 0.4%. And we have pulled the price rise one month forward, which explains the majority of it because of the different phasing of the prices. So therefore and the rest is a bit end-of-contract notification. So therefore, I think what I'm saying is there's not a deterioration on the ARPU in general other than a bit from end-of-contract notification, and this is lower than we estimated. Second, on the price rise, we have decided not to do it in 2020. And we have, on one hand side, absolutely paid respect to for the agent, but we also looked at sensitivity. So when there's certain higher reaction would have kicked in, that would have been also margin dilutive for us. The current momentum we see on net adds is compensating for that in 2020. And the momentum, if we can get it to a certain point, can also compensate that for a certain time in 2021. And to finish with your question, are we more price aggressive to make some cosmetics in customer net adds, I would say the answer is no. So our ambition is to create a long-term OFCF growing provider. So therefore, it's not about customer net adds. Having said that, the market has been when you watch acquisition price levels across different speeds, it has come down over the year and also in the last 12 months by 6%. And obviously, we are reacting to that to get a fair share. But the idea is absolutely not to change the price position, the value price position we have in the market compared to competition. That is not our strategy.

Mike Fries -- Chief Executive Officer and Vice Chairman

Yes. Well, listen, thanks, everybody. I know we're at the top of the hour here, a little bit past. So appreciate you joining us, as always, and we appreciate your support. Hope you stay well and safe for the rest of this summer. We've got a lot of positive things happening. We've talked about those today, the U.K. transaction on track. Great performance, all things considered through all of our markets in this COVID pandemic period. And we're coming out of it with a lot of positive momentum. So I look forward to talking to you in November. Take care.

Operator

[Operator Closing Remarks]

Duration: 93 minutes

Call participants:

Mike Fries -- Chief Executive Officer and Vice Chairman

Charlie Bracken -- Executive Vice President and Chief Financial Officer

Steve Malcolm -- Redburn -- Analyst

David Wright -- Bank of America -- Analyst

Lutz Schuler -- Chief Executive Officer of Virgin Media

James Ratcliffe -- Evercore ISI -- Analyst

Robert Grindle -- Deutsche Bank -- Analyst

Nick Lyall -- SocGen -- Analyst

Baptiest Coopmans -- Chief Executive Officer of UPC Switzerland

Matthew Harrigan -- Benchmark Capital -- Analyst

Christian Fangmann -- HSBC -- Analyst

James Ratzer -- New Street Research -- Analyst

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