Frontier Communications posted its second consecutive quarter of overall broadband gains as fiber net additions jumped 20% higher in Q1 2022 than the record it set in Q4 2021. During an earnings call, CEO Nick Jeffery said the vast majority of its new customers are new to fiber, which he said was a clear indication the company is taking share from cable rivals.
The operator added 52,000 consumer and 2,000 business fiber customers, more than offsetting copper losses of 34,000 across both segments. All told, it gained 20,000 broadband customers, more than doubling the 9,000 it added in Q4 when it achieved its first overall broadband subscriber growth in five years. The figure also marked a stark turnaround from a loss of 14,000 broadband customers in Q1 2021. Around half of its new customers are taking speeds of 1 Gbps or above.
Jeffery said on the call cable competitors are beginning to react to its progress. While some are making pricing moves, others are starting to invest in fiber themselves, he said. But Frontier isn’t worried about the latter eating into its momentum.
“Even then I reflect on the fact that we have at least a 12-month advantage in accelerating our build, locking in contractors for both labor and materials, fixing our forward prices and really delivering not just a better product than cable is able to do, but also a better service in many areas,” he said. “Some of our cable competitors have perhaps cut back on service more than they should have over time.”
On the fixed wireless access (FWA) front, Jeffery said it expects to see some “nibbling” in rural and remote areas where fiber rollouts are some time away, but noted he ultimately expects fiber to win out once deployed.
“FWA really is a fundamentally different proposition to high-speed fiber…it also has fundamentally different economics,” Jeffery said. “We can see that as data continues to grow in usage there must be a point at some point where the economics of FWA simply flip to being negative and highly negative if that relentless growth of data continues. So, I think what we’re going to see is FWA will be a feature in the market – it’ll always be there – but ultimately as data grows, as consumers want reliable high-speed fiber internet services, fiber will be the winner in the market.”
Q1 stats
Consolidated revenue of $1.45 billion fell 10.7% year on year from $1.68 billion. On the call, CFO Scott Beasley attributed the slide primarily to the impact of the end of Connect America Fund II support at the end of Q4 2021. Excluding that impact, revenue fell 5.9% thanks to a decline in video, voice and wholesale sales.
Consumer fiber broadband revenue jumped 12% to $254 million, but overall consumer revenue dropped 4.9% to $776 million. Business and wholesale revenue declined 7% to $666 million due to “strategic repositioning” efforts with key partners.
Frontier added 211,000 new fiber passings in the quarter, with over 100,000 of these deployed in March alone. Jeffery reiterated the operator expects to reach a total of 1 million new passings by the end of the year.
On the business front, Executive Chairman John Stratton noted there are now 400,000 business locations within 250 feet of its fiber and over 23,000 towers within 1 mile. “As we continue to build out our network, we expect to grow and convert these attractive in-footprint opportunities,” he said.