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 intensive fiber build-out plan that can speed up the corporate’s transformation from a legacy supplier of copper-based providers to a fiber-based supplier… Below the primary part of the plan, Frontier intends to take a position closely and move greater than 3 million properties and enterprise areas, enabling a complete of over 6 million properties and companies with Gig-plus speeds,” the corporate mentioned in a press release.
Increasing to three million further properties will take a number of years, as Frontier mentioned it plans to succeed in “roughly 495,000 further areas in 2021.” That apparently contains 100,000 new fiber areas already constructed within the first three months of this yr.
Frontier is analyzing whether or not it may well “not less than double the construct price subsequent yr,” Frontier’s newly employed CEO Nick Jeffery mentioned, according to FierceTelecom. “We now have 3.4 million whole fiber passings at present and plan to not less than double this footprint over the approaching years,” Jeffery additionally mentioned.
12 million properties on Frontier copper
Frontier’s present community consists of copper traces that move 11.8 million properties and companies and fiber traces passing 3.4 million properties and companies, Frontier mentioned in a presentation for traders. Even when 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 gives slower DSL service. Though Frontier did not promise to increase fiber to all and even to a majority of its copper areas, its presentation mentioned the corporate’s community has a “substantial aggressive benefit relative to opponents” as a result of it contains “12 million copper passings to doubtlessly convert to fiber.”
Frontier mentioned it’s planning for $1.5 billion in capital expenditures in 2021, up from $1.2 billion in 2020. The corporate mentioned its “incremental money value” for constructing fiber is “roughly $550 per location.”
Frontier gives Web service in 25 states. The corporate had 3.05 million Internet subscribers as of March 31, 2021, a drop from the three.18 million it had one yr beforehand. (These numbers exclude 4 states the place Frontier sold its network.)
Of these 3.05 million Web 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 yr over yr. Web earnings was $60 million, an enchancment over Frontier’s $186 million loss in Q1 2020. Frontier mentioned it makes $56 per 30 days on common from fiber Web prospects and $40.10 per 30 days from copper Web prospects.
“Important under-investment in fiber”
Frontier filed for bankruptcy in April 2020 after telling investors that its monetary troubles and buyer losses have been attributable to “vital under-investment in fiber deployment and restricted enterprise product choices.” Elements of Frontier’s fiber community have been put in by Verizon earlier than Verizon sold some of its operations to Frontier.
In January 2021, Frontier said it had failed to fulfill the end-of-2020 deployment deadline in 17 out of 28 states the place it accepted broadband funding from the Federal Communications Fee, although 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’s going to end the buildout by the tip of 2021, early sufficient to keep away from monetary penalties due to a 12-month grace interval supplied in US legislation. Frontier is in line to get another $370.9 million over 10 years from the FCC regardless of its earlier failure to complete a government-funded buildout on time.
In the meantime, a report commissioned by the California state authorities discovered that Frontier and AT&T have let their copper phone networks deteriorate via neglect since 2010, leading to poor service high quality and plenty of prolonged outages. To win the state’s approval for its post-bankruptcy plan, Frontier dedicated to deploy fiber to 350,000 California homes and businesses inside six years.
Frontier mentioned its Chapter 11 course of “lowered its debt by roughly $11 billion and annual curiosity expense by roughly $1 billion.” Frontier additionally mentioned it has “liquidity of over $1.3 billion at emergence, creating flexibility to reinvest in fiber community growth.” Frontier mentioned in a government filing that its whole present liabilities, together with long-term debt due inside one yr, at the moment are $7.2 billion, down from $19.2 billion a yr in the past.