Frontier says adopting Verizon bundles, pricing structure will enable smooth transition in acquired markets

A Frontier executive reiterated recently that when it completes the cutover of the Verizon (NYSE: VZ) wireline assets it is acquiring in California, Florida and Texas, customers will not see any disruptions.

Speaking to investors during its fourth quarter earnings call, Dan McCarthy, president and CEO of Frontier, said since it has adapted the same bundles and pricing Verizon currently uses, the telco can avoid the average revenue per customer (ARPC) impact it saw when it cutover AT&T's (NYSE: T) assets in Connecticut.

"We've adopted the Verizon bundles, products, including all of the bundles that are introduced as of yesterday, into the product family," McCarthy said during the fourth quarter earnings call, according to a Seeking Alpha transcript. "So there really is no chance that there'll be a sudden migration of customers to a different bundle structure, which had the significant ARPC impact."

In Connecticut, Frontier altered the existing AT&T pricing structure to be similar to Frontier's structure. The result was a second-quarter 2015 revenue decline of $5 million in the territory, a factor caused by broadband pricing migrations. Since that time the provider has been scaling up its subscriber base in the state, while introducing a new 100 Mbps residential DSL speed tier.

"On Connecticut, one of the key issues was that we actually changed some of our pricing structures and go-to-market plans to be more Frontier-like in Connecticut on day one," McCarthy said.

In addition to maintaining consistency for the broadband pricing, Frontier has put in plans to ensure that there will be no impact to Verizon FiOS video customers being transferred to its platform.

When Frontier cut over the AT&T U-verse customers to its own platform, a number of customers reported issues with their TV service going down, which Frontier had to scramble to fix. Frontier converted approximately 415,000 data, 875,000 voice, and 215,000 video connections in Connecticut. 

"In fact, the Verizon video cutover will take place over a number of days so that we minimize the potential impact, and we can back out of any step at any point," McCarthy said. "So that was probably the biggest single issue that happened on the Connecticut integration that ultimately led to some of the problems day one and in the first month or so."

For more:
- see the Seeking Alpha earnings transcript

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