Frontier adds 37,200 new broadband customers, narrows customer losses

Frontier continued to see its residential broadband customer base soar in the first quarter as it added 37,200 new subscribers, ending the period with a total of 1.9 million customers.

The service provider also made some progress with its video business, adding 5,000 net customers, bringing it to a total of 390,300 customers as of the end of March.

Total residential revenue was $496 million for the first quarter of 2014 as compared to $501.6 million in the fourth quarter of 2013, a 1.1 percent sequential decrease in the quarter. Average monthly revenue per customer was $59.07, up 28 cents from the first quarter of 2013, but down 37 cents from $59.44 in the fourth quarter of 2013.

Frontier said that the sequential quarterly decline in residential revenue per customer includes the impact of a November 2013 through January 2014 promotion with a bundled Frontier Secure offering.

In the business sector, revenue was $525 million, down 3.4 percent sequentially from $543.3 million in the fourth quarter of 2013. It attributes the sequential quarterly decline in average monthly business revenue per customer to lower business revenue from the decline in non-switched access revenue.

On a more positive note, the telco improved the rate of decline in business customers by 12 percent, losing about 4,400 customers as compared to 5,100 customers in the three months ended March 31, 2013. 

During the most recent quarter, average monthly business revenue per customer was $651.53, or 1.0 percent higher than the first quarter of 2013 and 1.9 percent lower than the fourth quarter of 2013.

Frontier has been enhancing its business portfolio with new offerings, including its recently launched security suite for small businesses and expanding its Ethernet footprint in New York, for example.

Due to ongoing and expected declines in voice revenue, overall customer revenue declined 2.3 percent sequentially to $1.02 billion, which was partially offset by an increase in data services revenue, various carrier dispute settlements, timing on certain CPE sales and lower non-switched access revenue due to the expected decline in wireless backhaul.

Ongoing customer retention efforts enabled it to reduce total customer losses sequentially to 9,600 from 18,700 customers in the three months ended December 31, 2013.

"First quarter broadband net additions of more than 37,000 established yet another new quarterly record for Frontier, growing share in 91% of our markets," said Maggie Wilderotter, chairwoman and CEO of Frontier, in the earnings release. "In addition, our first quarter go-to-market and retention efforts saw the lowest drop in residential customers in over five years with fewer than 10,000 customers lost in the quarter."

Overall revenue was $1.15 billion, down sequentially from $1.18 billion from the fourth quarter of 2013 and $1.2 billion in the first quarter of 2013. Frontier's first-quarter revenue declined sequentially by $26.3 million, or 2.2 percent, from the fourth quarter of 2013 and by $51.4 million, or 4.3 percent, from the first quarter of 2013.

Shares of Frontier closed at $5.96, down 4 cents or 0.67 percent, at the end Tuesday trading on the Nasdaq stock exchange.

For more:
- see the earnings release

Special report: Wireline telecom earnings in the first quarter of 2014

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