Frontier added 9,000 overall broadband customers in Q4 2021, recording its first quarterly subscriber growth in five years as substantial fiber gains outpaced copper declines.
The company revealed the figure in a preview of its Q4 results, which showed Frontier netted a record 45,000 fiber customers in the quarter. The figure was substantially higher than the previous record of 29,000 fiber customer additions that Frontier set in Q3 2021.
Speaking during Citi’s AppsEconomy Conference, Frontier CFO Scott Beasley said the fourth quarter “marked a critical inflection point for our transformation.” He added the company expects to “continue building on that momentum as we reach incremental homes and fine tune our go-to-market and overall marketing strategy.”
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The operator previously outlined plans to deploy fiber to 600,000 new locations in 2021 as part of a Wave 1 project, with Wave 2 encompassing 1 million new locations in 2022, 1.6 million in 2023 and 1.7 million or more each in 2024 and 2025. All told, it wants to reach 10 million locations by the end of 2025.
Beasley said supply chain issues remain a month-to-month challenge. But he added Frontier has taken steps to mitigate risk by signing multi-year agreements with vendors and diversifying its supply and has thus far been “encouraged by our ability to hit targets.”
He also noted the company believes it will be able to meet a cost-per-location target of $900 to $1000 for its Wave 2 build despite pressure from inflation. That’s thanks in part to the fact that Frontier already factored rising costs into its budget. But Frontier can also utilize existing aerial lines, underground conduit backbone and transit infrastructure to build fiber-to-the-home within its footprint for about 20% less than a newcomer would be able to, Beasley said.
Competition
Asked about potential competition from fixed wireless access (FWA) and satellite broadband services, Beasley said neither presents a material threat just yet. While FWA may gain traction in some ultra-dense urban locations and satellite in extremely rural areas, Beasley asserted neither technology will be able to stand up against Frontier’s gigabit fiber offerings. The company already offers 1 Gbps and is planning the rollout of a 2 Gbps plan in the first half of this year as well as a 10 Gbps tier somewhere down the line.
“It’s a technology we’re watching closely but don’t think it can compete with our core symmetrical speeds in fiber,” he said of FWA.
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Earlier in the week, executives from both Verizon and AT&T talked up their ability to bundle wireless service with home internet. AT&T CEO John Stankey predicted the industry will soon “see more consolidated offers going out to customers” which provide a mix of fixed and mobile connectivity, while Verizon’s Manon Brouillette said that FWA can serve as an entry point to help it upsell customers to mobile as well.
But Beasley reiterated Frontier isn’t interested in putting out its own mobile offering just yet. He said that’s because the company wants to maintain a clear focus on deploying fiber and has yet to see evidence that consumers’ broadband choices are influenced by whether or not an operator has a wireless offering. If that changes, he said, Frontier will be able to pivot quickly given its management team’s extensive wireless experience.