Frontier’s broadband subscribers
Let’s look at Frontier Communications’ (FTR) performance in the broadband space. Its customer losses continued as the company shed broadband and video subscribers in 1Q17. Frontier’s broadband subscribers fell ~2.5% sequentially to reach 4.2 million at the end of 1Q17. In 1Q17, on a net basis, the wireline player lost 107,000 broadband subscribers, compared with 91,000 losses in 4Q16. Frontier attributed this broadband subscriber loss to the migration to Ethernet from TDM (time-division multiplexing).
This decrease in broadband subscriber losses is primarily the result of Frontier ceding market share to cable companies offering superior speeds. Frontier’s biggest threat comes from cable companies such as Comcast (CMCSA) and Charter (CHTR) as they managed to add the most broadband subscribers.
According to a FierceTelecom report on May 3, 2017, “Frontier does not like losing customers, the service provider wants to attract stickier customers that purchase higher priced service bundles.” According to the same report, “Frontier said it achieved a third consecutive quarter of growth in broadband gross additions in its CTF[1.California, Texas, Florida] markets, which was driven by the first full quarter of robust marketing.”
Frontier’s broadband net additions in CTF and legacy markets
Frontier noted that, in 1Q17, broadband net additions improved sequentially in CTF markets, excluding the impact of non-paying account resolution. CTF broadband subscriber net losses fell from ~65,127 in 4Q16 to ~64,462 in 1Q17, adjusted for account cleanup. Legacy markets had 25,787 broadband subscriber net losses in 1Q17, compared with 7,494 losses in 4Q16. This figure reflects a one-time impact of automating processes to address non-paying customers, which accelerated deactivations.