Serving city dwellers and country folk alike, Frontier Communications provides phone, Internet, and satellite TV (through a partnership with DISH Network) services across 28 US states. The company has some 7.5 million residential and business voice subscribers. It also has 4.5 million broadband Internet customers and about 1.8 million video subscribers. Frontier is active mostly in rural and small to mid-sized markets, where it is the incumbent local-exchange carrier (ILEC). The company's top four markets in terms of subscribers are West Virginia, Illinois, Indiana, and New York. The company's 2015 acquisition of Verizon's wireline operations for $10.5 billion substantially expanded Frontier's footprint.
Frontier’s local and long distance services contributes about 45% of the company's revenues while its data and Internet services contribute about 45%, followed by switched access and subsidy revenues and others.
The company has operations in Alabama, Arizona, California, Connecticut, Florida, Georgia, Idaho, Indiana, Minnesota, Montana, Nebraska, Nevada, North Carolina, New York, Oregon, Pennsylvania, Tennessee, Texas, Washington, West Virginia, and Wisconsin.
Sales and Marketing
Frontier is able to remain competitive with other triple-play providers because of the TV service it offers through DISH Network. (Satellite TV operators can't offer digital phone service, which puts them at a disadvantage to cable companies such as Comcast and Time Warner.)
In 2014 Frontier added about $11 million to its top line, a 0.23% increase from 2013, to $4.7 billion. Revenue from data and Internet services rose 4%, nearly offsetting a 5% decrease in revenue from voice services. Revenue from other segments provided the increase, rising by 411 million.
Net income jumped 18% higher in 2014 to $133 million on higher revenue, investment income, and a decline in tax expenses. Cash flow from operations dropped to $1.3 billion at the end of 2014 from $1.5 billion in 2013 because of changes in assets and liabilities resulting from a change in accounts payable.
Residential landlines may be on the decline as more households switch to a wireless provider for their primary phone service, but Frontier operates mostly in rural markets, where cellular service can still be spotty.
Frontier has decentralized certain departments, such as sales and marketing, in an effort to improve customer retention and average revenue per customer. The company has also realigned certain corporate support functions in order to achieve improved customer service.
In 2014 Frontier partnered with Zipwhip to become the first tier one operator to text enable its landline numbers. It also partnered with Golden Artist Colors to offer a new fiber product for data and voice services.
Mergers and Acquisitions
In late 2013 it agreed to purchase AT&T's wireline operations in Connecticut for $2 billion. The deal -- which includes 415,000 data, 900,000 voice, and 180,000 video residential connections -- will enhance Frontier's services in its home state.
In 2014, Frontier agreed with the Connecticut Attorney General and the Office of Consumer Counsel that will guarantee customer and community benefits resulting from Frontier's proposed acquisition of AT&T's incumbent local exchange operations and statewide fiber network that provides services to residential, commercial and wholesale customers in Connecticut. As part of the transaction, Frontier will also acquire AT&T's U-verse video and satellite TV operations in Connecticut.
In 2015, Frontier did itself one better and bought Verizon Communications Inc.'s wireline operations for to residential, commercial, and wholesale customers in California, Florida, and Texas for about $10.5 billion in cash. For that payout, Frontier gained 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS video connections.