Home » Competition »Consumer News »Frontier » Currently Reading:

Frontier: Losing Customers While Raising Prices; Company Loses $643 Million in 2018

Phillip Dampier February 28, 2019 Competition, Consumer News, Frontier 1 Comment

In the last three months of 2018, Frontier Communications reported it said goodbye to 67,000 broadband customers, lost $643 million in revenue year-over-year, and had to write down the value of its assets and business by $241 million, as the company struggles with a deteriorating copper wire network in many states where it operates.

But Wall Street was pleased the company’s latest quarterly results were not worse, and helped lift Frontier’s stock from $2.42 to $2.96 this afternoon, still down considerably from the $125 a share price the company commanded just four years ago.

Frontier’s fourth quarter 2018 financial results arrived the same week Windstream, another independent telephone company, declared Chapter 11 bankruptcy reorganization. Life is rough for the nation’s legacy telephone companies, especially those that have continued to depend on copper wire infrastructure that, in some cases, was attached to poles during the Johnson or Nixon Administrations.

Frontier Communications CEO Dan McCarthy is the telephone company’s version of Sears’ former CEO Edward Lampert. Perpetually optimistic, McCarthy has been embarked on a long-term ‘transformation’ strategy at Frontier, to wring additional profit out of the business that provides service to customers in 29 states. Much of that effort has been focused on cost-cutting measures, including layoffs of 1,560 workers last year, a sale of wireless towers, and various plans to make business operations more efficient, delivering mixed results.

McCarthy

Frontier’s efforts to improve customer service have been hampered by the quality and pricing of its services, which can bring complaints from customers, many who eventually depart. Frontier’s overall health continues to decline, financially gaining mostly through rate increases and new hidden fees and surcharges. In fact, much of Frontier’s latest revenue improvements come almost entirely from charging customers more for the same service.

McCarthy calls it ‘cost recovery’ and ‘steady-state pricing.’

“One of the things that we’ve been focused on really for the better part of two years is …. taking advantage of pricing opportunities [and] recovering content costs — really dealing with customers moving from promotional pricing to steady-state pricing, and then offering different opportunities for customers both from a speed and package perspective,” McCarthy said Tuesday. “The quarter really was about us targeting customers very selectively and really trying to improve customer lifetime value.”

By “selectively,” McCarthy means being willing to let promotion-seeking customers go and being less amenable to customers trying to negotiate for a lower bill. The result, so far, is 103,000 service disconnects over the past three months and 379,000 fewer customers over the past year. A good number of those customers were subscribed to Frontier FiOS fiber to the home service, but still left for a cable company or competing fiber provider, often because Frontier kept raising their bill.

Currently there is 1 comment on this Article:

  1. Kevin Flynn says:

    Former customer here. Frontier is picking everyones pockets, and insulting them in the process. If you want to read a full account of my experience after Dan McCarthy attempted to “offer me an opportunity” I’ve documented it here https://www.dslreports.com/forum/r32385762-FIOS-Frontier-customer-service-nightmare-no-really-nightmare







Search This Site:

Contributions:

Recent Comments:

  • Arron: If you are looking stable internet at your location, then Irgdigital.com is providing best internet deals of 2019. You choose according to need at IRG...
  • Dave: Got this ridiculous fee on my bill after Spectrum basically told me I should switch to the newer modem because mine was old. There was never any menti...
  • alan jacoby: Thanks all you guys i was ready to hit the buy button!! Sounds like more b/s to me THANKS AL...
  • Don Rull: I just received the pods for both of my homes that have horrible coverage using the Xfi router. Unfortunately, the app will not work for me and, of co...
  • John: If Starlink and OneWeb deliver on the promise that their internet service from space will be comparable to ground based fiber optic cable, with speeds...
  • Dylan: Definitely for the better. Expect more companies to follow as soon as cord cutting ramps up further....
  • Dylan: Windstream is barely alive as is. Besides. I would be switching to Charter Spectrum if Windstream was declaring bankruptcy and trying to reorganize an...
  • karen: Please HELP ... how do we get rid of the annoying advertising for Spectrum's on Demand show LA's Finest!! I am tired of it showing up on our TVlineu...
  • Lee: And all 1000 property owners approached with an offer for a cell tower should hire a law firm that specializes in cell phone tower contracts. To avoid...
  • Kenneth Richner: I have a choice of two ISP where I live Frontier is one Vito is the other neither are reliable but Zito at least has 100 and 200 Meg speeds available!...
  • L. Nova: Time to bring the guillotines to the U.S....
  • Phillip Dampier: Folks, all of these flat indoor antennas, regardless of brand, are not going to work miracles. An outdoor antenna will always work better but if you d...

Your Account: