What Frontier Expects for Its Future Capex

Frontier (FTR) continues to invest in capital expenditure (or capex) to enhance its network. In 2Q17, Frontier spent around $0.26 billion on capex, down from $0.35 billion in 2Q16 and $0.32 billion in 1Q17.

During the Goldman Sachs Communacopia Conference held on September 12, 2017, Perley McBride, Frontier’s chief financial officer, talked about the company’s capital expenditures. McBride acknowledged that the capex spending in the past has been inefficient. Additionally, the management promised to commit to capital spending on revenue generation and cost-cutting initiatives going forward. However, Frontier’s management expects capex spending in the next year to stay in the current range.

Frontier has been continuously spending to enhance its network potential, expand Internet access availability, and boost speed. In order to compete against cable firms such as Comcast (CMCSA) and Charter (CHTR), which witnessed the most broadband subscriber additions, superior speeds will play a vital role for Frontier.

Frontier’s management forecasts capital expenditures to be in the range of $1.1 billion to $1.2 billion for the full-year 2017. In comparison, CenturyLink (CTL) anticipates spending nearly $2.6 billion on capex in 2017, while Windstream (WIN) anticipates spending around $0.84 billion.