Liberty Global finds time for some edge action

• Liberty Global wants to construct an edge infrastructure platform in Europe 
• It’s enlisted the help of Digital Colony to add the missing capabilities in a JV
• The project is expected to launch during Q3 2021 

It’s been a busy few days for Cable TV and telecoms behemoth Liberty Global. Having just caught its breath after the merger of its UK operation Virgin Media with mobile operator O2 was approved, it has now announced it’s joining forces with a “global investment firm dedicated to digital infrastructure”, with a view to developing an Edge Data Centre joint venture in Europe. 

Liberty Global will contribute its ‘digital real estate holdings’ (cable head ends and data centres etc), while its partner, Digital Colony, will invest along with Liberty Global in developing a European Edge infrastructure platform, to be called AtlasEdge, which will have more than 100 active edge facilities from inception. 

Digital Colony is headquartered in Boca Raton, Florida, and says the JV is an opportunity for it to apply its entire “value-add playbook, leveraging [its] operating expertise, strategic M&A capabilities, and access to institutional capital.” 

That playbook can make use of a $32 billion portfolio of digital infrastructure assets across a digital ecosystem including towers, data centres, fibre facilities and small cells, it claims. 

AtlasEdge has lined up anchor tenancies from Liberty Global operating companies looking to extend high quality broadband connectivity to cable customers and enterprises in four European countries: Virgin Media in the UK and Ireland; Sunrise-UPC in Switzerland; and UPC in Poland. 

Josh Joshi will join and lead AtlasEdge’s Board of Directors as Executive Chairman. Joshi has over 20 years of experience in the digital infrastructure sector with senior positions at several multinational companies including as CFO of Interxion. 

The overall objective is to serve the growing demand from cloud providers, streaming services and enterprises for facilities through which they can distribute (and collect data from) low-latency applications and services for 5G, gaming, IOT and edge compute. As data traffic grows and gravitates to the edge of the network, the companies say, AtlasEdge’s ability to access edge connectivity and efficiently distribute mission-critical and content-heavy data traffic will be increasingly relevant.

Indeed. But it’s still early days for the ‘edge’ with many variables in flux. At this point it’s uncertain as to what the area will look like once the smoke clears and the corporate asset shuffling settles down. How important will the hyperscalers be, for instance? Will the edge simply be a low-latency staging post for multi-cloud applications? Or can it foster a distinct and important set of edge applications? Will it stimulate the diversification of the cloud services market or eventually escalate its consolidation? Dalia Adib, Edge Practice Lead at STL Partners, agrees that there are many variables in play and the prospects for the whole area are still uncertain. 

 “In fact I think one of the main motivations for this move by Liberty Global was more to do with the desire of telecoms/network operators to divest assets to free up capital, increase agility and all those good things,” she says.

But there’s a bigger systemic problem too. Like many infrastructure-heavy developments in telecoms, the existing technologies - whose shortcomings the new technologies seek to overcome - insolently improve vastly (and at lower cost) in the gap between the new technology’s promise and its delivery on the ground, sometimes wiping out its market. 

First generation LEOs for instance. It’s investors (and there were several) failed to notice that cellular was spreading out and getting cheaper so the opportunity for problematic conversations via low-flying satellites was shrinking considerably.