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Frontier Communications’ Subscriber Trends in Q2 2018

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Aug. 3 2018, Updated 10:50 a.m. ET

Frontier’s customer retention rate in Q2 2018

Frontier (FTR) has been trying to keep its customers and maintain a lower churn rate amid a highly competitive telecommunications sector. In the second quarter of 2018, its consumer churn rate of 1.95% was stable sequentially despite seasonal headwinds. It also improved YoY (year-over-year) from 2.24% due to initiatives to address retention efforts and product churn. Frontier believes its improvement in churn rate was driven by the CTF (California, Texas, and Florida) FiOS (fiber-optic service) market.

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Focus on keeping churn rate lower

Frontier is focusing on maintaining a lower churn rate since lower churn rates are favorable for telecommunications companies and a crucial metric for customer retention. CTF FiOS and Legacy led to the overall improvement in Frontier’s customer churn rate of 1.95% in the second quarter. the churn rate was 1.76% for Frontier Legacy and 2.25% for CTF operations. In the first quarter, Frontier Legacy’s churn rate was 1.71%, and CTF’s was 2.3%.

Verizon (VZ) reported a postpaid phone churn rate of 0.75% in the second quarter. AT&T’s (T) postpaid phone customer retention rate was 0.82%.

The struggle to retain customers

Telecommunications companies are struggling to retain subscribers amid a saturated US wireless market. AT&T and Verizon have started offering unlimited data plans to compete with T-Mobile (TMUS) and Sprint (S) to gain subscribers. Rising competition in the online video streaming space has put even more pressure on telecommunications companies.

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