Frontier spends $123.6 million to boost DSL, business services in New York

Frontier Communications (Nasdaq: FTR) put up $123.6 million in 2012 to expand its broadband and business service reach in its New York territory.

One key area of focus for the network upgrades was increasing broadband speeds.

Similar to other markets, the upgrades are enabling Frontier to deliver two higher speed offerings: Broadband Ultra, which supports up to 12 Mbps, and Broadband Ultimate, which delivers up to 25 Mbps.

Frontier deployed more IP-based DSLAMS in addition to a mix of bonded ADSL2+ and VDSL technologies to support the expansion of these higher speed tiers.

Kevin Smith, SVP and GM of Frontier's New York operations, said the telco upgraded "155 of its 194 switching offices and 214 remote DSLAM/switches," enabling it to offer faster speeds to "403,000 New York households."

In addition, the telco is upgrading interoffice data transport networks within the Rochester and Chenango markets to a 10G Ethernet Ring Protection Switching (ERPS) topology.

On the business services side, Frontier is expanding the availability of its Metro Ethernet, in addition to Dedicated Internet Access (DIA) and an IP-VPN service that rides over its MPLS network.

All of these new service initiatives will be augmented by IT software upgrades in the Rochester area, including help desk and network operations, which it says can be leveraged across its entire 27-state customer base.

Augmenting its organic expansion efforts is a New York State broadband grant it is using to upgrade its transport network between Gloversville and Eagle Bay in upstate New York. When it completes the project, Frontier will be able to deliver up to 25 Mbps to 54 percent of households in Hamilton County.

Frontier has set some ambitious goals for broadband. This year, it plans to bring broadband services to 85 percent of its markets in both its existing markets and those it entered through its acquisition of Verizon's (NYSE: VZ) rural lines.

In the majority of its legacy territories, its broadband market share is greater than 50 percent, which refers to customer penetration, while in the acquired territories it entered through the Verizon acquisition it's less than 50 percent. 

In Q4 2012, Frontier expanded coverage of its 20 Mbps service by 18 percent to reach 40 percent of its footprint. Despite being able to offer 20 Mbps in more markets, Robert Starr, senior vice president and treasurer at Frontier, said during the Goldman Sachs TMT Leveraged Finance Conference 2013, that they "have a lot of customers that stick with 6 Mbps."

For more:
- see the release

Earnings roundup: Wireline telecom earnings in the fourth quarter of 2012

Related articles:
Frontier's Starr: Broadband service available in 85% of existing markets this year
Frontier Q4 revenues decline to $1.23 billion on subscriber losses
Frontier protests West Virginia broadband program grants
Frontier invests $75 million in Washington's broadband, business networks