Frontier's Wilderotter: We need to earn the right to do any more M&A
Frontier Communications (Nasdaq: FTR) is aware that there are still opportunities to scale via acquisitions of other service providers, but today it remains focused on growing its business organically, the telco's chairman and CEO told investors. The telco hasn't made a transformational acquisition since 2010 when it purchased Verizon's rural assets, a move that effectively tripled the size of the company.
Wilderotter (Image source: Frontier)
Speaking at the Goldman Sachs 22nd Annual Communacopia Conference, Maggie Wilderotter, chairman and CEO of Frontier, said that the past three years were focused on integrating and building off the services it acquired from Verizon (NYSE: VZ).
"I think for our company over the last three years our heads have been down, we tripled the size of the company, it was about integration, conversions, sort of swallowing a whale--letting our arms around that business and then taking that business and growing it to build a model--as to why we bought those properties in the first place," Wilderotter said.
With those transitions largely complete, the service provider has been focused on scaling its broadband, business, and wholesale services such as wireless backhaul.
Wilderotter said that while it's not ruling out other deals in the future, the mentality today is to work on improving its existing business.
"I felt in our company we need to earn the right to do any more M&A and that is by delivering on what we have already done, and we do think that there will be opportunities for more consolidation on the scale side," she said. "We have been a company that has been very disciplined in sticking to what we are good at and what we know and partnering instead of purchasing for ancillary products and services and still making very, very good margins with that type of profile."
One area where it continues to innovate is with broadband.
While it won't release its Q3 2013 earnings until Nov. 5, it continued to see the fruits of its efforts to enhance its broadband service standing in Q2 2013. During that quarter, the service provider added 29,500 new customers, a factor it attributed to its low-cost Simply Broadband offerings.
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