By Laura Rich
July 24, 2010

The company’s doing just fine, but it has had to pull back in some regions after regulation and competition made it tough to do business there.

by Laura Rich, contributor

After a few years in France, Liberty Global (LBTYA) pulled up stakes and left. In South America, it retreated from seven countries down to one. “We realized it was never going to go our way,” said Liberty Global CEO Mike Fries.

On a panel at the Fortune Brainstorm Tech conference in Aspen, Fries and others discussed the challenges to expanding or investing in media abroad. For Liberty in France, the dominance of cable player Canal Plus over the infrastructure and content left it with little share of the market. In both regions, local business competition coupled with changes in regulation forced them out, he said.

Europe, in particular, has been no friend to media and technology companies, holding up mergers such as Oracle and Sun Microsystems and leveling accusations of privacy, copyright and antitrust against companies like Google and Microsoft.

Fries says this seeming distrust among officials in European governments creates a challenging environment.

“They actually think the Internet mafia IS the mafia in Europe,” said Fries (pictured).

Even so, Liberty has been doing just fine there. The company, which has 27 million subscribers in 14 countries, saw record growth in Europe in the first quarter from subscriber growth for Internet and phone services. Its divestiture in France came much earlier, in 2006, with the sale of cable company UPC France SA for $1.5 billion to private equity firms Altice and Cinven.

The biggest difficulty in doing business beyond the borders, though, isn’t the regulation or the competition, Fries and others said. It’s the economics of addressing a fragmented marketplace.

“That fragmentation is a friend for people who are willing to find the seams in this content environment,” said Fries.

For now, foreign companies in Europe will also have to grapple with a severe recession. Said Fries, “Europe is a tough place to do business in last couple of years.”

You May Like