Frontier hopes to steal business market share from cable in biz sector

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Frontier sees its acquisition of Verizon's (NYSE: VZ) assets in California, Florida and Texas as an opportunity to increase market share for existing copper and small business customers that may have churned over to cable operators.

Speaking to investors during the Deutsche Bank 2016 Media, Internet & Telecom Conference, John Jureller, CFO of Frontier said a key focus will be on enhancing existing facilities that Verizon may have downplayed in recent years.

 "We continue to drive our capabilities, particularly in the small to medium business market," Jureller said. "We have had some good performance across our existing footprint, including Connecticut, and we see that as opportunity as well in California, Texas and Florida where proportionately cable companies had a greater share."

Jureller added that "we think we have an opportunity to get into those markets and take back share and grow that revenue share as well."

The service provider will achieve these goals through a mix of its own capital and the CAF-II funds it will receive once it completes the Verizon deal.

While Frontier is going to expand its fiber-based broadband footprint in the three new states, the telco is keen to enhance the copper-based services.

Given its increased focus on wireless and driving FiOS growth, Verizon has continued to see its copper-based subscriber base continue to decline.

During the fourth quarter, Verizon reported that total broadband connections dropped to 2.1 million as it lost more DSL subscribers after losing 94,000 DSL customers.

"We're going to focus on growing the copper share in the copper markets we're taking over," Jureller said. "Verizon has continued to lose broadband customers in their copper markets, and we think it's probably the relative level of attention that they have paid to those markets as compared to its FiOS markets."

By contrast, the majority of Frontier's footprint is copper-based, something that it has expertise in upgrading and maintaining.

"Ninety percent of our markets are copper networks and we continue to take share," Jureller said. "We took share in 75 percent of our markets in 2015 and we think there's a tremendous opportunity in California, Florida, and Texas to take share there in 2016 and 2017."

For more:
- hear the webcast (reg. req.)

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