Frontier Communications’s broadband subscribers
In the previous part, we discussed Frontier Communications’s (FTR) EBITDA[1. earnings before interest, tax, depreciation, and amortization] margin over the last few quarters. Now let’s look at the company’s performance in the broadband space. Customer losses continued as the company shed 99,000 broadband and 92,000 video subscribers in 3Q16.
Frontier Communications’s broadband customers fell ~2.2% sequentially to reach 4.4 million at the end of 3Q16. During the quarter, the wireline player lost 99,000 broadband customers on a net basis, compared to 77,000 broadband net losses in 2Q16.
This decrease in subscriber losses was mainly attributed to disruptions caused by the onshoring of its call centers. The broadband subscriber losses are primarily the result of FTR ceding market share to cable companies offering superior speeds.
Frontier’s broadband net additions in CTF and legacy markets
Frontier Communications (FTR) noted that in 3Q16, its CTF[1. California, Texas, and Florida] broadband net additions rose ~25% sequentially. The decline was driven by legacy markets, which had added broadband customers on a consistent basis.
CTF broadband subscriber net losses narrowed from 100,000 in 2Q16 to 75,000 in 3Q16. The legacy markets had 25,000 broadband subscriber net losses compared to 25,000 net additions in 2Q16.
Frontier Communications’s acquisition of Verizon’s (VZ) wireline assets in CTF provides the company with a bigger customer base and the opportunity to return value to shareholders by extracting cost synergies. FTR notes that it’s confident that as it ramps up marketing and adjusts its offers, it could see continued improvement in net subscriber performance in 4Q16.