Frontier Communications is still regaining its footing after emerging from bankruptcy earlier this year, but the company is hoping it can rev its engines enough to hit a key inflection point with its fiber business next year.
During a Bank of America investor conference, Frontier CFO Scott Beasely said there’s no denying the company’s copper business is “in a state of long-term decline” but it believes rapid growth in its fiber business will more than make up for that slide soon enough.
The operator recently announced it is aiming to hit a total of 4 million locations served by end-2021 and build to an additional 1 million locations in 2022. Beasely noted “we’ve said after 12 months we expect 15 to 20% penetration, in 24 months we expect 25 to 30% penetration and then beyond there working up toward the mid-40s penetration in the terminal state.”
“So if we build fiber at an increasing pace, sell at those kind of penetration rates we should be in a position in late 2022 where the fiber growth offsets the copper decline,” he continued, adding “the longer our build goes on the more cumulative net adds we should be able to earn.”
While it can’t outright stop the copper decline, Beasely asserted there are levers the company can pull to slow it down. For instance, he said investments Frontier is making to improve its customer service operations will benefit copper as well as fiber customers. He added the idea is to reduce churn so that “as we reach those locations, we still own that customer relationship because we really like the advantage of converting a copper customer to fiber.”
The CFO also noted that its consumer fiber business won’t be the only growth driver for Frontier. He said its wholesale division is expected to reach an inflection point late next year as well and “we expect growth” in its enterprise division, especially with small and medium business customers.
“So not all of the burden of growth falls on consumer fiber,” he concluded.