Frontier-Focus on bundling, new acquisition - Q3 Performance Tier 2 ILECS

Connecticut-based Frontier Communications is clearly a service provider in transition.

During the third quarter, Frontier lost an additional 30,436 voice lines, leaving it with 1.4 million lines. This was a higher increase than the Q2 09 21,891 loss, but slightly lower than the 31,593 loss in Q3 08.

Two slight growth areas for Frontier were VoIP and bundled services. Frontier's VoIP service now serves 631,000 customers, while the bundled service penetration saw a 56 percent increase during the quarter, respectively. However, Internet data services added a paltry 7,521 subscribers down from the 13,700 it added in the second quarter and 12,646 in Q3 08.

Although Frontier was able to stem some of the line loss bleeding through service bundling, Frontier Chairwoman and CEO Maggie Wilderotter said during the third quarter earnings call that it has also seen less of its customers move out of the region.

"We are encouraged by these trends, and also note that our customers are seeing value in our voice services, with over 50 percent of our phone customers on multi-year price protection plans," she said in the recent Q3 earnings call.

But the biggest challenge for Frontier is just about to come as it moves ahead with its acquisition of Verizon's rural lines in 14 states. Although Frontier's acquisition has gained the approval of three state PUCs thus far, the precedent set by the troubles fellow FairPoint has gotten into with its purchase of Verizon's New England lines has got some regulators a bit concerned.

Regardless of the protests mounted against Frontier's Verizon acquisition, the rural ILEC says that it has a stronger balance sheet and it will be more responsive to customer needs in the regions it will take over from the tier one incumbent carrier.

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Frontier-Focus on bundling, new acquisition - Q3 Performance Tier 2 ILECS