Frontier's rating cut by S&P due to increasing competition

The ongoing competitive effect of cable telephony and wireless substitution has driven Standard & Poor's Ratings Services to cut Frontier Communications' (Nasdaq: FTR) rating for corporate credit and senior unsecured debt to double-B-minus, three levels below investment grade.

The downgrade comes as Frontier just announced some progress in paying down debt, saying earlier this week that it had paid back almost $503 million in senior notes that had come due Jan. 15.

Frontier continues to move beyond the initial operational integration challenges that came with the company's 2010 acquisition of former Verizon properties, having said in its most recent earnings report last November that integration cost obligations had fallen sharply from previous quarters. However, its financial performance has been limited by increasing competition, S&P said. That third quarter earnings report in November featured growing profit, but a decline in revenue. Thus, the ratings agency moved Frontier's rating from double-B to double B-minus.

S&P said Frontier will face the same challenges in the next few years, though the telco could get its rating raised if it can stoke improvements in access lines and revenue from data services.

For more:
-see this Total Telecom post

Related articles
Frontier recently added energy services to its menu of offerings
Frontier reported slightly lower revenue in the third quarter 2012

Suggested Articles

Fueled in part by deals in the financial sector, SD-WAN revenues grew 8% sequentially in the first quarter of this year, according to IHS Markit.

Futurewei employees work in research labs across the United States, including in California, Texas and Washington.

Microsoft Azure announced on Monday that it has selected Aryaka as one of it first partners for a new managed services provider program.