Frontier's Wilderotter: Integration of Verizon's former systems ahead of schedule

Frontier Communications (NYSE: FTR) appears to ahead of schedule with integrating Verizon's rural lines.

Maggie Wilderotter, Frontier

Wilderotter

While the integration of the Verizon's (NYSE: VZ) rural lines in 14 states is clearly a daunting task given its size, Maggie Wilderotter, CEO and chairwoman of Frontier Communications, speaking during the Goldman Sachs 20th Annual Communacopia Conference, outlined the service provider's integration and new service strategy.

In the coming weeks, Frontier said it will convert the first four of 13 systems it acquired from Verizon onto their operating systems.

"Upon completing this conversion, we will use it as a blueprint to apply to the remaining states in the first half of 2012," Wilderotter said. "This is accelerated from our original plan of the end of 2012."

Wilderotter estimates that when the final state is converted onto its system, Frontier will save over $100 million in yearly cash expenses.

"This cost reduction will keep us on track to $600 million in annual synergies by the end of 2012, which is $100 million higher than our original estimates," she said. 

Of course, cost reduction is only one element of Frontier's overall goals. As it completes its integration duties to reduce costs, Frontier continues to ramp up its broadband, business and wholesale capabilities to increase its revenues.

Although Frontier said it will see some near term revenue setbacks specifically in New York and Pennsylvania as a result of Hurricane Irene and Tropical Storm Lee. In addition, its four-state conversion could impact sales for about 30 days.

Despite these issues, Wilderotter said it plans to stay on track with its plans to stay within its "capital expenditure guidance to expand broadband, fix congestion and meet wireless backhaul enhancements," Wilderotter said.

Frontier's revenue drive is centered on a few key fundamental areas: expanding the availability and penetration of broadband services, reducing access line loss, delivering new products and offering dual and triple play service bundles.

At the end of Q2 2011, Frontier expanded broadband to 466,000 new homes since July 2010 with plans to reach 1 million homes when it finished its broadband build out in 2013.

"Our current average penetration levels West Va. is 15 percent," Wilderotter said. "Our program to address to high speed penetration is just starting in third quarter and will continue throughout the fourth quarter." 

In addition to consumer services, Frontier is expanding the availability of business services, which represents half of its customer revenue.

To make good on the business promise, Frontier is beefing up its sales force and is offering new services, including fiber and copper-based Ethernet that are being sold through local sales representatives.

"Our commercial sales teams are focused on developing and maintaining and predictable pipeline of new revenue and that's how they are compensated," Wilderotter said. 

For more:
- listen to the webcast

Related articles:
Frontier Q2 revenue down from Q1, but Verizon line integration process is on track
Frontier employs ADTRAN for next phase of its broadband expansion effort
Frontier's lofty goal: Put West Va. in top 5 for broadband access
Maggie Wilderotter, Frontier Communications: Wireline's most powerful people

Suggested Articles

For the first time in nine years, the data center switch market recorded a decline due in part to COVID-19, according to research.

While many vendors have bemoaned the impact of the COVID-19 pandemic in their earnings reports, Ciena rose above the storm in its fiscal Q2 earnings.

Juniper is working to diversify its product portfolio across 5G and 400G, and find a wider range of router customers, according to two of its execs.