Frontier is taking a bullish stance on rolling out FTTH with plans to roll out service to 50,000 to 100,000 over the next two years. The service provider's network expansion is just one of several moves it has planned following a series of subscriber declines in recent quarters.
Perley McBride, CFO of Frontier, told investors during the Goldman Sachs Communacopia 2017 conference that the service provider FTTH rollout strategy is based on the needs of each market it serves.
Not surprisingly, the initial target for Frontier’s FTTH builds will be new housing developments, where it can work with a homebuilder to offer fiber-based service as an amenity to potential homeowners.
“Anywhere there are Greenfield or subdivision builds, that’s always fiber-to-the home,” McBride said during the event, according to a Seeking Alpha transcript. “We will do about 50,000 of those this year and another 50,000 to 100,000 next year. We do see instances where overlaying fiber on top of Fiber-to-the-Home and the Fiber-to-the-Node has made some sense.”
McBride added that once the FTTH network is in place, Frontier can upgrade speeds with minimal customer disruption or capital once it is built and running.
“I think the beauty of the fiber-to-the-home network is that it is low cost,” McBride said. “If you need to then move into the next generation of speed, it’s not a very capital intensive change you have to make.”
Being an ILEC that has a sizeable copper wiring facilities, FTTH is just one part of the broadband equation. The service provider continues to examine other options such as VDSL2, vectoring and Gfast.
In May, Frontier began its Gfast journey in Connecticut. The telco aims to increase in-building broadband speeds for customers that live in apartments and multidwelling units (MDUs) throughout the state.
“We tend to look to technology upgrades that will enable, what will enable 50 megs, a 100 megs, or 200 megs and whether those products and services can be deployed across that platform,” McBride said. “They are 80% fiber-fed and the question is what do we need to deploy across that to get those incremental speeds?”
Improving broadband churn, increasing subs
By expanding its speeds via copper and FTTH network architecture where it makes business sense, a key focus for Frontier is going to be on two main issues: reducing churn and raising subscriber counts.
While Frontier was able to improve broadband customer metrics and churn overall, the service provider still lost a total of 100,000 broadband subscribers during the second quarter.
Legacy broadband declined by 33,000, down from the 26,000 it added last year as voluntary churn rose in these markets.
“In the second quarter, we saw improvements across our customer metrics and churn, and when you look at our Fios markets, the biggest opportunity is to earn improvement,” McBride said. “It’s probably two-thirds churn improvement, one-third on the selling side.”
In order to mitigate further broadband churn, McBride said Frontier is putting new processes in place to handle customer call resolution. This will include investing Pega customer interaction platform at its call centers.
McBride said that after rolling out the Pega platform in its internal centers, “we have seen improvements in the first call resolution and a decrease in dispatches.”
Additionally, the service provider is rolling out new 50 and 100 Mbps speeds as well as a Fios self-installation process for consumers. The service provider expects the Fios self-installation process will improve customer satisfaction by providing customers the ability to complete Fios installation on their own schedule.
But the ultimate ongoing goal for Frontier in the broadband arena is to stay pace with cable competitors Charter and Comcast.
These two cable MSOs have been aggressively increasing speeds and marketing promotions in the markets where they compete directly with Frontier.
The service provider has increased its initial speed promotion for the third quarter from 50 Mbps to 100 Mbps.
“One of the things that we changed in our third quarter promo was to lead with 100 Mbps,” McBride said. “There is really no speed that we can’t match and we just need to be leading with 100.”