Everyone, thank you very much. We ran a minute over there as I was talking to Charlie about fixed wireless access, but...
We can talk about that as well if you want.
We can go into that one in some detail. I am delighted to be able to present to you today, and thank you everyone for attending. My name is David Wright. I run the Telecoms Equity Research Team here at Bank of America.
Delighted once again this year to be presenting Liberty Global, represented by Charlie Bracken, CFO, as I'm sure many of you know, and perhaps less well known, but soon to be better known, if I might, is the CFO of Sunrise, Jany Fruytier.
Correct.
Okay, thank you.
Try saying that fast.
Yes, exactly. And I say that, of course, because one of the recent strategic announcements of Liberty Global is to spin off Sunrise, so we can look forward to having full coverage of that later on this year. And with your presence, we will, of course, zero in a little more on Switzerland. But I just wanted to begin with you, Charlie.
Earlier this year, you came to market with your strategic review, so to speak, with your sort of four or five big strategic, I guess, announcements or reviews across your operations, one of which was to spin Sunrise. And we'll come to that shortly. In terms of those other big shifts that you talked about, why don't we just begin with the U.K., for instance? The creation of a NetCo.
Can you just talk around the theory of that, the advantages that can bring, and where that kind of sits within the whole network evolution in the U.K.?
So I think the matter to us is a de-conglomeratization. We bought back 650 million shares over the past few years. We're down to 350 million. Our stock price hasn't performed, and we believe we're greater than the sum of the parts. To that end, you're going to hear a lot about Jany. We think it's a very valuable asset.
But also in the U.K., we think creating a NetCo provides the optionality to roll up the altnets, but also to bring in partners like Sky and also to create separate funding vehicles. And really, with all our assets, trying to position them for independent IPOs or spins.
And the NetCo is an important part of the U.K. jigsaw puzzle because the U.K. has a lot of strategic moves to make, whether it's altnets, what's the future of ITV, what happens to the resellers like TalkTalk and Leb ara.
We need to create vehicles which allow us to consolidate, rationalize, and finance. So as I think about our story, I'm sorry, I'm going to interrupt you there. What we're looking to do is create a series of separately listed vehicles over the next 3-5 years.
Start with Sunrise this year, which we think will be a value creative, and we'll talk about that. The second move would be to something in the Benelux in the next couple of years. And then in 3-5 years, it's time to start thinking about a U.K.-listed champion as well.
Interesting. So I feel like that narrative from you guys has evolved a little. We obviously had the announcement to overbuild the U.K. coax network a couple of years back in the summer, and there was the separate 7 million fiber build that was announced too. It's now kind of within the narrative that NetCo could be used to consolidate the altnets.
It does seem like the altnet business model has been questioned a lot, I think, by the market as one that's maybe less sustainable in a higher rate environment. Do you feel like this is almost an opportunity that's come to you guys to move faster on the fiber overlay and take advantage maybe of some of these opportunities?
Well, I think our view is that there probably is only room for 1.5-2 networks per market. We can debate that. The rural areas probably make sense to only have one network. Just to remind you, the economics of a fiber build, at a 100,000-foot view, our math would say if you have an existing network, you can make money at, say, 25%-30% penetration.
That was the rationale for our Lightning build, which is our own expansion. For an altnet, it's more like 50%-55%. The reason is they have to build a core network, they have to build a basic product proposition, billing platforms, depending on what model they go for. They go for the wholesale model, and of course, they have to rent it.
The truth is that in an era of low interest rates, at a time when BT wasn't building fiber, they felt they had a chance to get in their own Yorkshire or the west of England or whatever, and then they could flip it. I think the evidence has been that BT has been relentlessly ready to build this fiber network, and therefore they have to get a 50% market share.
If you look at the market as a whole, 25% is BT retail, 25%, actually 40% on footprint is VMO2, 25% Sky, and then it's TalkTalk, Vodafone. So to make a success, they need to basically get not Virgin, not BT onto their network, and they have to get it. And that's obviously been a challenge. And you see these companies with 10% penetration, and to get it, they've had to go very low prices.
So from our perspective, particularly with the rising interest rates, it feels like now is the time to take advantage of the consolidation. And are you sitting comfortably? There are 100 of these players out there. So we've already bought one at the debt value. We don't necessarily think these things are worth par. And we have to create vehicles to facilitate that consolidation. So we have two vehicles.
One is obviously an off-footprint. So just to remind everybody, in the U.K., there are 28 million homes, and we own about 16, so there's 12 to go. We created a company with InfraVia called nexfibre, which basically is looking to build, leveraging our marginal economics and anchored by the anchor tenancy of VMO2. So that's really Lightning, as we used to call it, off-balance sheet.
The second thing is if we separate out the network of VMO2, which has some synergies, there's two benefits. One is obviously that allows us to have an acquisition currency to buy on other network assets, possibly nexfibre in. And secondly, it makes it easier for wholesale partners to come in. And the obvious one is Sky.
In terms of the decision to go to fiber as opposed to coax, in the U.K., the big definition across Europe when you can upgrade your network is really about whether you're ducted or not. And Jany will talk a bit about Switzerland, but in much of continental Europe, it's not ducted. The Benelux being a very good example. So when you actually have to put in fiber, you have to dig up the road, which is labor, and that's a pretty high cost.
Depending on how long it's the rural areas, it can be as much as $2,000 a home. I think in America, it's $7,000 a home. But if you've got the conduit or the pipe, it's only $100. And so our view was that it's probably worth it for a net $100 to take our existing homes and do what we called fiber up and upgrade that.
And one of the benefits of the Netco structure is we could possibly take some of that CapEx and financing into that vehicle where we think we get more attractive pricing.
I observed a panel at a conference last week where BT, CityFibre, and I see VMO2, your CFO there, were present along with Sky's director of broadband acquisition strategy, who I referred to in my question as kingmaker.
I think they're in a very strong position. They're good at that.
They're in a heck of a position, actually.
But one of the-
Things that CityFibre, it was Greg, the CEO, mentioned was that consolidation was not straightforward because of different standards, different levels, qualities of installation. Is that something that you guys are observing? Is that something that?
Yeah, look, I mean, I think not every build is the same. Not every construction cost per home is the same. But we had that experience, as you may recall, at least Virgin Media O2 arises from the cable build-out of the 1990s in which there was everything.
Those who have been around, we had Comcast U.K., which built very well, and then there were companies that built less well. I won't mention their names. BT and Westminster Cable. Sorry, did I say that?
You've still got the tax losses.
You've still got the tax losses, $25 billion. So I think that figuring out how to upgrade and alignment networks is something we've done before, and I think it's fixable. But your point's well taken. I think we've been naive to say that every build is the same.
And then I guess the final question around this is that it was a question put to the Sky representative, which is, if you are a wholesale, if you're an ISP taking a wholesale product, do you want to have multiple wholesalers?
If I'm Sky, do I want to have some of my customers on BT, some on VMO2, some on CityFibre, where I've got three wholesale interfaces, three routes to customer service if something goes wrong? Is that bringing me a complexity that I don't need as Sky? And I just say, screw it, I'll go with BT. Do you think that the multiple wholesale option is seamless?
Well, I think all things being equal, you want one wholesale partner. So the question is, does Sky want to go with rental economics or does he want to go with ownership economics? And question mark, is ownership economics on the table with NetCo, if you want to put a creative name? I suspect it probably is. I think it's probably harder with BT Openreach.
But remember, for us, this wholesale revenue is all found revenue. I think it's also fair to say that it's not beyond the wit of man to, at a price, because I agree with you, having two wholesale partners, complicated, whatever, at a price to figure that out. I think the other thing you should remember is over time, we're seeing increasingly the rise of what's called the flanker brand. We saw that a lot in the mobile sector.
I feel like the most successful mobile brand, probably in the U.K., is giffgaff, which is an O2 brand. And that's a business that's growing 7%, 8%, 9% pretty consistently for the past few years. And what that business is doing is just leveraging the O2 network.
So I think that this idea of creating in-house flanker brands, which you'll certainly see more of, I think, is the way. But I think it's very hard to see how ownership economics on a network works beyond 1-2 players, 1.5-2. But again, that's a trust me statement rather than a show me statement.
Let's jump over to the Benelux. So you've set up the Benelux holding co. I'm assuming the idea is that the Telenet equity just drops straight into that. It's hard not to look at that and think, you've got Vodafone Ziggo as well. Is there something to be done here? I don't know if that's anything you can really elaborate.
I think we're, listen, we're very clearly signaling that in 2-3 years' time, as I tried to say at the beginning, we see a listed Benelux champion as something worth driving towards.
And the combined Vodafone Ziggo, Telenet will be a EUR 3 billion over the year business. It's a little bit over 11 today, but there are non-core assets, which you could dispose of, towers, properties, non-core media assets, which will probably get it back down to around 5x at a very attractive cost of capital that is fixed for at least another 5-6 years. I think Vodafone Ziggo's borrowing around 3%, Telenet's borrowing around the same, which is pretty attractive capital.
And it's our view that there are potential synergies from combining the two entities, both financing synergies, tax, but there are also some operational synergies. But frankly, there's just scale synergies.
If you look at the Liberty Global stock price, and maybe we'll get onto this, our view would be there's a question of how much value we're getting for any of our Benelux assets in there. So that's what we're driving towards. Now, you rightly point out, what does that mean for Vodafone? Vodafone, to those who don't know, is a 50% shareholder.
They're not a Dutch business. But I think by creating the optionality for them to either roll up or for other people to come in and offer to finance a purchase of their stake, I think that it's something which at least sets a clear direction to our shareholders. And again, we recognize realizing that value is going to take time, but that is the direction of travel.
Okay, look, and then just, I guess, the slightly less operational, I mean, it's very operational, of course, in terms of how those businesses are run. But from your own perspective, the ventures portfolio, you had a very successful sale of All3Media.
In terms of the multiple, let's say the arbitrage versus the Liberty share price, is that something that you could just see over time, assets within ventures mature a little, get sold off, da da da? Is that the?
I think there's 2 trees. Look, we are basically, we're in it for the long haul. We've been lucky enough to be in the sector for 25 years. It's been a tough sector for the last 7 years, particularly since the end of the broadband wave. But we have a track record. We hope we're creating value. We've made a big bet in the last 7 years in which we've been buying our stock.
We had 900 million shares in 2017. We now have, we expect 350 million-ish when we spin Switzerland. So we bought back over 60% of the stock at what we hope is an accretive price. My blended average stock price over that period has been around the mid-20s. We clearly believe that we can create value and position value, but we're not going to do that through the conglomerate.
Part of the value creation is not just positioning these FMC assets into separate listed entities. We'll talk a bit about Jany's company in a minute, but you can make a case that Jany's company alone is worth very near the Liberty Global stock price today. Also the ability to grow businesses on the side with marginal economics.
We believe that if you look at the telecom sector, as with Iliad on Friday in Paris, there are some very interesting growth sectors. The shift to cloud is a very big growth area. I could make you the case the rise in live events, sports rights is a very interesting growth area. The role of AI and services and tech services and financial services is a big growth area.
What we've tried to do is take a portfolio of our investments and rationalise them around these key thematics. One of our key thematics, which I did back in 2017, was when we got out of the channel business, which we thought was a dying business, we went into TV production, which we thought was a growth business. We invested in All3Media. We made a series of acquisitions.
We positioned it possibly to merge with other assets. I think our view was it got to a point where the growth of that sector, the best days are probably behind us. I hope I'm wrong for RedBird's sake, but it feels like the streamers have probably hit peak streaming, peak purchasing, and therefore there's less demand. It was for that reason that we were ready to sell at 12 times.
But if we felt it had long-term growth prospects and could become what we call a unicorn asset that we could spin to our shareholders, we might have looked at that.
Okay, very good. We're going to come back on some of the implied share price dynamics, which is always a fun conversation, but I did want to move over to Sunrise a little. The basic justification for the spin, I'm assuming, is that you bring it out of the conglomerate and the conglomerate discount that is undoubtedly present.
Thank you. I'm glad you said that.
Yeah, undoubtedly present. You probably say it's in the high tens of %. Is to bring it out, obviously, of the Liberty conglomerate, but also it being a Swiss asset. They do tend to trade a little bit more on dividend. It's a different cost of capital market. We've seen this dynamic with Swisscom. I'm assuming that's the basic theory around this, apart from the fact that it's a great.
Well, let me give you the sort of rationale from a Liberty point of view. Jany , we must can give you the story, but we've announced that Sunrise will pay a CHF 240 million dividend, and that's a dividend floor, which implies a progressive dividend. It will be levered in a 3.5-4.5 times range.
It will go out at 4.5 times, which is a little bit top of the end of the range, but you can assume there is some growth and some deleveraging. You can assume it's announced to a free cash flow this year of CHF 360 million-CHF 400 million. So that CHF 240 million is pretty well covered, and you can assume excess capital is going to be available for deleveraging.
So, if you take that CHF 240 million and you apply a reasonable dividend yield, a reasonable man can argue about this. But I think Swisscom's at 4%, Swisscom and bonds are at 1%. Let's just hypothetically use 6%. You're probably around the CHF 4 billion market cap. And CHF 4 billion is about $4.5 billion.
Liberty Global stock price yesterday implied a market cap of $6.5 billion. And post the spin, aside from everything else it owns, aside from everything else, Liberty Global will have at least $2 billion+ of cash and additionally $500 million of liquid investments. So we think that this is a very, very key step to unlock that valuation. And I'm sure it'll trade in a very choppy way when it goes out.
But ultimately, it should settle around that dividend, which we think will also be largely tax-free to Swiss investors. And if that is the case, the pitch to a Liberty Global shareholder is, come on this journey with us. Your first shareholder remuneration, if you like, will be this Swiss spin. We are then going to hopefully create value in our core FMCs in the U.K.
We're announcing NetCo, which will probably get done next year. Obviously, we've got the Benelux coming up. We've obviously got the possibility of a U.K. spin at some point, but also the ability to create value in these ventures and whether we can create that value by monetizing for cash or we can do it by spinning off. That is the roadmap.
Okay. So, there you go. That's your dividend commitment.
Good. Don't fuck it up.
Exactly. That it says that on your form of.
We know each other for a while.
Exactly. So, look, first things first, obviously, you are Sunrise, but it is a reasonably recent merger of Sunrise and UPC. How is that integration progressing? Are you now towards the closing stages, or is there still more to come?
I think most of the integration has been done. We have some last still bits left, so mostly on the core network integration, some of the legacy IT system switch-offs. But for all intents and purposes, I think also if you look at it from a cost-to-capture perspective, which is the integration cost, we have more than 90% behind us.
So, it is really sort of cleaning up the last bit that typically takes a bit longer that you don't want to force because it has customer impacts. And sometimes, especially on the network side, it just doesn't make sense to accelerate that from a payback perspective.
So that we will have, we'll have some minor efforts left. I think also what everybody's aware of is the integration of those two customer bases that is ongoing, that has created some tension over the last two years.
We're also getting towards the end of that. So I think if you look at it, and I heard all of the stories about the U.K. and the Benelux in Switzerland, you have an asset where most of the integration is done. We have a clear network strategy that is different than the rest. Happy to elaborate a little bit on that afterwards.
We have a growth plan in front of us, and we believe that there is some in the setup of the asset with adjacent services in B2B. There's also some new areas that we can go after. So from that perspective, you have a clean story with growth potential, with the integration behind us, with limited CapEx intensity given the 5G rollout that is there, given the hybrid strategy, given the integration, and therefore also the IT harmonization and transformation behind us.
It's a natural point to start the journey on and to sort of bring investors on board to benefit from that.
Absolutely. Okay, so lots to unpick there, but essentially, it's a pretty tough environment, the Swiss market. You've got this very sort of very high-level service-level operator and incumbent in Swisscom. You've got this very aggressive guy in Salt. And the price points are quite remarkably different, but we are seeing that in the KPIs.
Where is Sunrise positioned? If they're the extremes, are you guys in the middle? I've always been quite nervous about operators in the middle. I like to think operators perform when they're the best or they're the cheapest. So I'm interested in your view.
Yeah, sure. Look, I think there's a couple of points to be made. It's a tough market on the one hand. I think it's a stable market on the other hand. What do I mean with that? I think internet pricing has been stable, perhaps aggressive, especially if you see what you get for that internet price, but it hasn't moved. So, you can from there play in a field that is at least stable.
First, mobile, perhaps slightly different, but what we would argue is that actually promotional intensity levels have gone down a bit over time. So there, again, from an inflow output perspective, it has stabilized. Now, that inflow is sometimes still higher than the backbook, so that is something to play around with. But I think, again, tough market, but stable, which helps to sort of then define a right strategy to compete in first.
I think secondly, perhaps different than some other markets, the Swiss market is very quality-focused. So, I think, yes, you have especially in Salt an aggressive attacker. At the same time, I think we can debate on how those shares are, but we would say 50%-60% of the Swiss market is very value-driven, but with that quality angle. So, they are ready to pay a bit more for a good service.
Now, this is where I think our strategy comes in because you have Swisscom, which is very high-priced in comparison to us and to Salt, and they can continue to demand that premium. Now, what our strategy is, is on the one hand with Sunrise to move close to Swisscom, acknowledging that there is some price discount to that, but we can play in that market. I think we have done well.
I think we have done a number of plays to support that, like the Swiss- Ski sponsorship, which is a big thing in Switzerland, getting that, making sure that people recognize us as a quality brand. We have set up some loyalty programs like O2 has here in the U.K. We have added additional services.
So effectively, what we're doing with the main brand is creating this very rich offering with good service, with good loyalty programs, with additional services so that we can play in that. Now, that is a trajectory that we're on. I would say we're not fully there, but we're seeing good traction. I think brand recognition, brand awareness, that is all trending up.
So, there's a big part of the market that we can play in with some discount, but significantly higher pricing than on that more price-sensitive segment where you have Salt playing, where you have yallo playing, where you have Wingo playing. Those are the second brands of us and of Swisscom. So, I think you'll see the market going in two extremes where a large chunk sits on the premium segments.
We play with Swisscom, Salt, and our second brands play in that lower segment. I think what's interesting in that as well is that Salt recently came out and has said that they see yallo, our second brand, and Wingo as their main competitor. Also letting go, if you will, wanting to compete on that, of course, at that lower price.
We'll see if the market wants to go there, but we feel strong that with that dual brand strategy, we can play effectively in those two different segments.
Okay, very good. And let's talk network. You are predominantly cable today. I'm not sure whether you've got any fiber. It's very, very small. Predominantly cable operator. You have a fairly slow-moving Swisscom, and that's a function of some regulatory issues, but either way, their fiber has lagged, but their ambitions are high in terms of their coverage. And the risk that could perhaps be perceived is that Salt has access to that fiber. So, they have access to this.
We as well, by the way.
You have access to it too. I agree with that. But in terms of how do you think about the migration of your cable or the evolution, I should say, of your cable strategy over time?
Yeah. Good question. And I think.
Charlie gets this one all the time from me.
No, and I think it's a key element to get right in our story and sort of why let me try to explain simply why we feel so strongly that this hybrid network strategy that we're on is the right way to go. I think a couple of things to note. Swisscom has indeed 40% coverage now. They have said they go to 70%-80%.
They have approximately 5-10 percentage points of that country ready to deploy once, as you say, and that is now more or less done. That's a regulatory issue behind them, so we expect it to go up, but that's the fiber element of it. Now, we are only three real in-home players in the market. As you say, Salt has access. We have access as well.
Therefore, I think we are all playing in that network and we have all access to it. I think then also important to note, as we got into the merger, we had 50% of the customers approximately on wholesale access of Swisscom, partially fiber, partially DSL, and 50% on our own network. We have 70%, 75%, if you add our partners' coverage in there as well.
So that was the starting point. Now, over the last three years, we have migrated some of those DSL customers onto our HFC footprint. And on the other hand, we have increased a bit of fiber customer as we sold those.
Three years down the line, the distribution of that customer base, of course, has changed between fiber and DSL, but overall, whole versus rented is still more or less the same, both from a total base, but also from an inflow perspective.
That is also on the fiber-only footprint. So HFC is still a meaningful product for our customers. I don't know if you've seen, but we last week announced that we're going to upgrade our network to 2.5 gig, whereas fiber is on 10 gig.
All to say that in Switzerland, I think we have the opportunity to always offer to our customers at the moment the best speed available. What we see in the Swiss market is that fiber or HFC is not a theme as such. We're in other markets. Sometimes people are actively marketing fiber or the legacy technologies.
For us, it's about speed and customers don't really care. So that is the current point. I think given that we at the moment have a base that is 50% approximately still owned and bought, and so that also sits in our cost base.
Now, fast forward for the next years, what we have forecasted and what we believe, and I mean, if you take a 5-, 7-, or perhaps 10-year forecast, we see perhaps a slight erosion of that base going to fiber, whereas the rest will still be on our own network. And so for us, the question very much is, Charlie first talked about a 30% penetration that you need in order to do. We have a total 30% market share, i.e., our fiber at the moment is at 15%.
So for us to deploy the capital, given that we have the access already, that we have a good wholesale buyer economics, that is not a customer point. What we're saying is we don't see the erosion quickly in our margin. We already have a large chunk in that. So therefore, we can play with that DSL versus fiber distribution to offset some of that.
We have good cooperation with them. Our customers don't care. So therefore, to then now go out and say we want to deploy all of that CapEx to, in the future, perhaps get to that payback, it just doesn't make sense from a capital perspective. And I think what is also interesting, of course, let us play out five to seven years. We are at the moment the biggest wholesale buyer customer of Swisscom.
The moment we decide to potentially build our own network, I think they will come and talk to us to say, what are you intending to do? Perhaps there is another way to think about this. Therefore, we feel strongly that from a cash flow perspective, if you take that dividend perspective into consideration, this is by far the most economical thing to continue on that hybrid strategy.
Okay. So essentially, there's an element of there's a very good network. There's a kind of sweat the asset element at the moment until maybe the obligation is there to really move forward. And then you have options, whether you invest or whether you even.
Or put another way, I think it's 50/50 coax fiber, and we don't really think it's materially going to change. So the benefit of buying or buying the fiber is already embedded in the cash flows. Now, the exam question is, will there be an imperative to go to 100% fiber?
And he's making the point that at a certain point, canton by canton, village by village, at some point, there's an economic case to build or buy from somebody else. So we don't think there's a big risk to the cash flows.
Okay, fair enough. I think that's very, very credible. Okay, so if we then think about the growth and the cash flow growth, can you just walk us through the parts a little? So, for instance, I think on pricing, you guys are having to look at a much lower, in fact, I don't think you're raising prices this year. Is that right across the portfolio?
Correct.
So, if we think about how you're actually going to grow your cash flows, whether that be market share growth through to OpEx synergies, lower CapEx, etc., if you could just give us a simple walkthrough?
Sure. I think we typically start with saying that we believe we have three growth engines. The main brand, Sunrise, yallo as a second brand, and B2B as a third growth engine. I think if you look at it over the last three years, what we have seen is that yallo and B2B have grown well.
And that in the main brand, as part of the integration of the two brands, as part of the repricing of that UPC base, we have had a drag. And so therefore, if you look at it combined, there was this flattish line. I think some quarters, some growth, but in general, flattish.
Now, what we believe fast forward is that on the main brand, given that some of that pricing tension is behind us, given the fact that we have launched a number of adjacent services, given that we expect churn to come down as we get out of this repricing integration, I think we'd like to think that we're fantastic integrators, and we are, but operationally customers, of course, in that process have some tensions.
And so therefore, churn has been elevated over the past two years on the back of that. So all to say that the dynamics that we saw in the main brand, we see easing. We believe technically as the integration of those two brands is done, there's a further easing. And then with some adjacent services further penetrating of FMC and multi-mobile, there is a changing dynamics.
And one other thing happens is yallo in that market still continuing to grow. We have only been a fixed provider in that second brand for 1.5 years, whereas on mobile, that's been 6 years. So therefore, there is quite some growth left there, we feel. And then B2B, as we have integrated to two brands, we now have a meaningful competitor to Swisscom.
By the way, Swisscom has 80% market share. We have 20%. So there is that under penetration. So all of that to say that I think different dynamics in those three engines, but we believe that in the combined of those three, there is revenue growth. Now, I don't say mid-single digit percentages, but there is some growth that is different than what we have seen so far.
Now, of course, there is some margin erosion in that to offset that growth, in part a little bit of that whole buy-or-build to wholesale economics on the one hand. Some of those services, especially in B2, have slightly lower margins, but all in all, still a meaningful margin growth, we believe, over the coming years.
And then how we think about OpEx is there is still some of those synergies left on the one hand that I was talking about, not meaningful, but still some as a tailwind. We see inflation coming down, so also that normalizing a bit.
What we have done as part of the integration over the last three years is we invested in the Swisscom partnership, in the loyalty program to set the company up to sort of harvest those three growth engines. So again, those costs are now normalizing out.
And then with some efficiencies from a digitization, from an AI that we talked about before, I think there is some left. So, all in all, we believe that OpEx is flattish then in that. So that again, that falls nicely down to EBITDA, right? Having the integration behind us, having the 5G rollouts behind us, the IT transformation, again, you can take an assumption on what CapEx is, definitely not growing.
So, that organically then all drives nice free cash flow growth, we believe, in the coming period, with then interest being, I mean, we need to see where that goes. But as Charlie said, we start at 4.5 times excess cash flow used to.
You're fixed until 2028, mate.
At least 2028, 2029, and 2031, but yeah. So having that, and then with some delivering coming from the excess cash flow, we believe there is free cash flow growth in there.
Okay. That's a very exciting story. That might be your time, right?
No, I tell you what that is, the bloke from Scotiabank.
Okay, okay. But we have literally a minute or two left. That's a super run through of Sunrise. We've talked about NetCo, fiber expansions. If you just wanted to lay out, Charlie, very simply, the kind of, let's think about an 18-month roadmap of kind of where all of these things start to execute, occur, however that might be. I guess first of all, we get the Sunrise spin.
Maybe you could talk us through how all those other strategic.
Yeah, I mean, look, I think one step at a time. So, if my CEO were here, he'd be going, let's just get one step done. What I've tried today is to set out to you is the narrative has been for the last six, seven years, we have shrunk our equity down. So, we believe we've created value by buying undervalued stock, undervalued assets at a discount.
And in doing so, we've reduced the number of shares from 900 to 350. Now we're going to try and unlock that value. So there's a pivot that's going on that we announced in March. And I should have said the key driver of that was we managed to re-domicile to Bermuda last year, which was not about tax. It was about giving us the corporate flexibility for spins, trackers, all those kind of things.
So, our existing shareholder base, which is the long-only U.S. shareholder base, we're inviting them to come on this journey with us. And the first step will be we are going to unlock the value of our most sort of ready asset. So, the strategic M&A has largely been done in this market. The network strategy is very clear.
They've got the tailwinds of synergies to come through because, as Jany said, the cost of capture has been hitting the P&L, and then that's going to drop away. So there's a pretty good growth story, pretty clear roadmap for them to grow free cash flow and with it, dividends.
And we believe that we can position that with Swiss retail, Swiss index funds, and European funds on the Swiss exchange such that you'll get virtually today's stock price as a dividend. That's our hope.
That's going to be happening in a couple of markets there in November, sorry, in September, and we'll be doing the spin itself in November. And then in 2025, we'll have to see, but the roadmap is clearly to do something around U.K. NetCo. But that will be realising for our investors a couple of years out because we've got some strategic moves and continuing to work on trying to position our Benelux assets for a spin, let's say, in 2026.
You'll also see us consolidating control of certain ventures and selling out of other ventures. So we've sold out of all three. You might see us taking control, and again, with a view to positioning those with public investors or indeed in control transactions.
Okay. Well, it looks like we've got a very exciting, let's go beyond 18 months for Liberty Global. So it goes for me to say thank you for everyone attending. Thank you very much, guys.
Thank you.
Thank you for your interest.
Thanks.