Frontier Communications emerged from Chapter 11 chapter on Friday, saying that it plans to double its fiber-to-the-premises footprint by extending fiber to an extra 3 million properties and companies.
“Frontier is deploying capital and pursuing an extensive fiber build-out plan that will accelerate the company’s transformation from a legacy provider of copper-based services to a fiber-based provider… Under the first phase of the plan, Frontier intends to invest heavily and pass more than 3 million homes and business locations, enabling a total of over 6 million homes and businesses with Gig-plus speeds,” the corporate stated in a press launch.
Expanding to three million extra properties will take a number of years, as Frontier stated it plans to succeed in “approximately 495,000 additional locations in 2021.” That apparently consists of 100,000 new fiber places already constructed within the first three months of this 12 months.
Frontier is analyzing whether or not it can “at least double the build rate next year,” Frontier’s newly employed CEO Nick Jeffery stated, based on FierceTelecom. “We have 3.4 million total fiber passings today and plan to at least double this footprint over the coming years,” Jeffery additionally stated.
12 million properties on Frontier copper
Frontier’s present community consists of copper strains that move 11.8 million properties and companies and fiber strains passing 3.4 million properties and companies, Frontier stated in a presentation for buyers. Even if Frontier achieves its objective of doubling its fiber community, over 8 million properties and companies would stay caught on Frontier’s previous copper community, which offers slower DSL service. Although Frontier did not promise to increase fiber to all and even to a majority of its copper places, its presentation stated the corporate’s community has a “substantial competitive advantage relative to competitors” as a result of it consists of “12 million copper passings to potentially convert to fiber.”
Frontier stated it is planning for $1.5 billion in capital expenditures in 2021, up from $1.2 billion in 2020. The firm stated its “incremental cash cost” for constructing fiber is “approximately $550 per location.”
Frontier offers Internet service in 25 states. The firm had 3.05 million Internet subscribers as of March 31, 2021, a drop from the three.18 million it had one 12 months beforehand. (Those numbers exclude 4 states the place Frontier offered its community.)
Of these 3.05 million Internet subscribers, 1.3 million are on fiber. The decline in prospects is from the copper service, as Frontier says it has added fiber prospects for seven consecutive quarters. Frontier reported Q1 2021 income of $1.68 billion, down 6.3 p.c 12 months over 12 months. Net earnings was $60 million, an enchancment over Frontier’s $186 million loss in Q1 2020. Frontier stated it makes $56 per thirty days on common from fiber Internet prospects and $40.10 per thirty days from copper Internet prospects.
“Significant under-investment in fiber”
Frontier filed for chapter in April 2020 after telling buyers that its monetary troubles and buyer losses had been brought on by “significant under-investment in fiber deployment and limited enterprise product offerings.” Parts of Frontier’s fiber community had been put in by Verizon earlier than Verizon offered a few of its operations to Frontier.
In January 2021, Frontier stated it had failed to satisfy the end-of-2020 deployment deadline in 17 out of 28 states the place it accepted broadband funding from the Federal Communications Commission, despite the fact that that funding program solely required 10Mbps obtain speeds and 1Mbps add speeds. Frontier had accepted $283.4 million in annual assist over six years to deploy service to 659,587 properties and companies in 28 states—the corporate now says it will end the buildout by the tip of 2021, early sufficient to keep away from monetary penalties due to a 12-month grace interval offered in US regulation. Frontier is in line to get one other $370.9 million over 10 years from the FCC regardless of its earlier failure to complete a government-funded buildout on time.
Meanwhile, a report commissioned by the California state authorities discovered that Frontier and AT&T have let their copper telephone networks deteriorate by way of neglect since 2010, leading to poor service high quality and lots of prolonged outages. To win the state’s approval for its post-bankruptcy plan, Frontier dedicated to deploy fiber to 350,000 California properties and companies inside six years.
Frontier stated its Chapter 11 course of “reduced its debt by approximately $11 billion and annual interest expense by approximately $1 billion.” Frontier additionally stated it has “liquidity of over $1.3 billion at emergence, creating flexibility to reinvest in fiber network expansion.” Frontier stated in a authorities submitting that its whole present liabilities, together with long-term debt due inside one 12 months, are actually $7.2 billion, down from $19.2 billion a 12 months in the past.