Frontier wraps $10.5B, 3-state acquisition of Verizon wireline properties, plans to expand workforce

Frontier has completed its $10.5 billion acquisition of Verizon's wireline operations in California, Texas and Florida, a deal that nearly doubles the mainly rural telco's size.

By completing this deal, Frontier immediate gains about 3.3 million voice connections, 2.1 million broadband connections, and 1.2 million FiOS video subscribers, as well as the related incumbent local exchange carrier businesses.

With the Verizon (NYSE: VZ) acquisition now complete, Frontier said that new customers will begin receiving monthly bill starting later this month.

A key focus for Frontier will be on enhancing and expanding the copper and fiber assets it's acquiring in these three states.

One element of that will be an expanded rollout of IPTV service. The service provider announced during its fourth quarter 2015 earnings call that it would roll out Vantage TV to over 3 million households over the next three to four years. It also plans to enhance the capabilities of the current FiOS and copper-based DSL platforms with new speeds and capabilities not available today.

Frontier's Vantage video services will be available to nearly 50 percent of the 8.5 million households in Frontier's current footprint. Additionally, Frontier's pending acquisition of Verizon's wireline assets in California, Texas and Florida will enable Frontier to extend Vantage TV service to over 3 million additional households.

The service provider has also maintained that in order to avoid the initial customer churn and operational issues it had when it acquired AT&T's (NYSE: T) wireline assets in Connecticut, it has adopted and will maintain the same service packages offered by Verizon in these three states. 

After cutting over the AT&T U-verse customers to its own platform, a number of customers reported issues with their TV service going down, which Frontier had to scramble to fix. Prior to completing this latest Verizon asset deal, the telco conducted a number of mock cutovers.

By adapting the same bundles and pricing Verizon was using, Frontier said it can avoid the average revenue per customer (ARPC) impact it saw when it cutover AT&T's assets in Connecticut.

Besides the network assets, Frontier will add approximately 9,400 employees, 5,000 of which are located in California, to its workforce.

Although the typical trend in large acquisitions is to lay off workers, the telco recently told the Pasadena Star-News that it plans to hire 200 additional employees in California, alone.

A large majority of the California workforce it will acquire are members of the International Brotherhood of Electrical Workers union or the Communication Workers of America union.

In October 2015, Frontier reached union labor agreements with the IBEW, AFL-CIO in California and Florida.

Separately, Frontier carved out an agreement with California workers represented by the CWA District 9 union in July 2015.

Following the initial announcement of the Verizon acquisition last year, Frontier received regulatory clearance from the U.S. Department of Justice, the Federal Communications Commission, the California Public Utilities Commission, the Public Utility Commission of Texas, and other public authorities. Additionally, Frontier received the full support of the CWA District 9 and the IBEW Local 543, and the IBEW, AFL-CIO Local 824.

For more:
- see the release
- Pasadena Star-News has this article

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