THE FRIDAY INTERVIEW:AMERICAN-AUSTRALIAN Dana Strong probably would have been forgiven by her Colorado-based employer Liberty Global if she had passed late last year on the chance to run UPC Ireland, its cable and telecoms subsidiary.
“I kid you not when I say that the day that UPC was talking to me about taking the job was the day the IMF moved in to discuss the bailout terms with Ireland,” Strong says, arms folded from the other side of a conference table in her office in East Point business park in north Dublin.
Strong and her husband were even staying in the Merrion Hotel, where Ajai Chopra and his fund troops were billeted.
“The photographers were outside and you could hear the conversations in the breakfast room. It was scary in terms of timing.”
So why leave sun-kissed Australia and its booming economy for the damp and cold climes of bankrupt Ireland?
“I just really thought this company was poised for growth,” she explains, with the rain pelting against the window.
“The [€400 million] network investment was largely behind it and they were at the beginning of really capitalising on that and maximising the growth opportunity.”
UPC’s second quarter figures, released on August 3rd, would seem to lend weight to this view. The company’s Irish broadband subscriber base rose by 32 per cent year-on-year to 224,800, while its telephone customer base increased by 56 per cent to 121,200.
Its digital TV subscriptions rose by 5 per cent, although its overall base – when analogue and MMDS customers are included – declined. It is also one of the few domestic services companies creating jobs in the recession. On July 23rd, UPC said it would hire an additional 50 staff within weeks and invest a further €80 million in its fibre network. It already employed 900 staff.
Its success has been a combination of good value and fast internet speeds. Its entry level triple play of digital TV, telephone and fast broadband costs €65 a month. It is the best offer in the marketplace. It also has the fastest broadband speeds of up to 100MB. Its entry level product is 25MB.
“When times are tough, households look at the value of going out to the movies versus the value of staying home and watching a movie or surfing the net. It tends to be a compelling proposition.” Recessions, however, also tend to result in the accumulation of bad debt and customers falling behind with their bills. What’s the UPC experience been?
“You’re right to point it out. I would have expected to see some problems in our bad debt arrears; we call it non-pay churn. We’re seeing levels this year that are better than last year, which was lower than the year before. And we haven’t seen any increase in disconnects due to non-payment. We would very much hope it would continue that way.”
UPC has spent big to make the customer gains it has. In addition to the chunky network investment, millions have been spent on a rebrand (UPC was created by the merger of NTL and Chorus) and a flashy marketing campaign, with television advertisements fronted by Craig Doyle.
Is the business making a profit? “We were just a smidge profitable last year by my recollection,” Strong says. “We are free cash flow positive at the moment, but only just. That was recently. It was a huge breakthrough. We’re now in a position of starting to repay the debt of upgrading the network.”
Liberty Global is still a “long ways away” from getting a return on its Irish investment, having bought NTL and Chorus, she says.
“It was a bold move on Liberty’s part and it really shows the courage of their convictions in relation to cable, triple play and bundling.”
In a technology-driven business such as UPC’s, innovation is key. Standing still is not an option. Eventually, Eircom and others will catch up on broadband speeds, and pay TV rival Sky might even dip its toes in the telecoms market – just as it has done in the UK.
“Mobile is certainly an opportunity the company will look at,” Strong says, adding that it would be as a virtual operator.
She describes Sky as a “very strong” competitor. “The recent moves by Sky to freeze prices are a response to some of our innovation in regards to value.” She’s sanguine about the launch of Saorview, the free-to-air digital terrestrial TV service. “I don’t see it changing the consumers’ appetite for channels and products. If you love TV, you want your choice.”
She also argues that there’s plenty of headroom left for UPC to exploit its existing cable footprint, which covers 807,000 homes.
“In telephone, we’ve only captured 24 per cent of our potential market. We’ve still got a lot of opportunity on broadband. We want to have three services in each household. It should keep me busy for a while.”
UPC is also making gains in the corporate market. “We just won a €1 million contract with the Department of Justice . . . that was a solid win for us. We’ve got a really good list of clients: Google, Citicorp, Bloomberg.”
She’s also relaxed about a renewed challenge from Eircom, which recently announced a €100 million investment in fibre.
“We’re so differentiated from them at the moment that we look at their network upgrade as a logical step, but it will take a period of time. It’s not a fun process.”
Born in Ohio, Strong spent the past 12 years in Australia running satellite operator Austar. An Australian citizen, Sydney is the city in which she has lived most.
Strong’s father moved around in his role as a hospital manager, taking her to Chicago, Florida and Philadelphia. She moved to Boston and dabbled in accountancy with Coopers Lybrand before becoming a management consultant with Mercer.
“Accountancy wasn’t for me. Consulting fitted me very well and gave me exposure to a lot of different industries and a good schooling on problem solving.”
It was through Mercer that the Austar opportunity came up. Late last year, she decided to step out of her comfort zone by coming to Ireland and setting up home in Portmarnock.
Her husband is a TV producer with his own company in Australia. “He travels back and forth a bit. Thank goodness for the modern age – you can get a lot accomplished on Skype, phones, video-conferencing, e-mails etc.
“So far it’s working out, but it’s a risk. I will admit that for sure.”
Strong has a self-confident air and seems supremely organised. Refreshingly for an Irish chief executive, she doesn’t claim to be at her desk at the crack of dawn, staying until nightfall. “No matter what’s going on in the office, I leave by a certain time so that I’m home to give the kids a goodnight kiss, have a little play and give them some good family time before they go to bed.”
Her TV background means she loves the medium, although, with two young children, she doesn’t have time to be a couch potato.
"One of my favourite shows at the moment is Modern Family. It makes me giggle, giggle and giggle. It's so funny.
“I try and tune into the news every day. [With] my kids for breakfast, I will admit that we like to have a little bit of TV going on. So I have a lot of Mickey Mouse in my life. I get about probably about half an hour, maybe an hour a day to watch TV.”
Strong’s parents arrived in Ireland for a month on the day of the interview. Her daughter starts school soon and the boxes from her move are still being unpacked. Life in Ireland is taking shape, although she anticipates settling back in Sydney in the long term.
“I have an ambition for my children that when they reach a certain age, we won’t be moving . . . so they can drop roots and have lifelong friends.”
How long will she stay in Ireland?
“I hope for quite a while. I don’t actually have any limitations in my head. As long as they [Liberty Global] will keep me I guess is a good way of saying it.”
On the record
Name:Dana Strong
Age:41
Family: Married with two children
Lives: Portmarnock
Hobbies: "I love cooking and entertaining with friends. I've a big travel bug and I like staying fit."
Something we might expect:"At home, we are power users of UPC services with TVs, PVRs, computers, phones, and i-everything in use all the time. It's my homework and the whole family is happy to help."
Something that might surprise: "I was quite a sportswoman in my teenage years. Soccer was my real passion. I was the sweeper. I think I liked it because I could command the field . . . I was dictating play. My stripes were coming out already."
