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

Phillip Dampier February 28, 2019 Competition, Consumer News, Frontier 7 Comments

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.

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Kevin Flynn
1 year ago

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

Lauren
Lauren
1 year ago

Why is it that I got cable/internet through frontier for $90/month, and it ends up being over $180-200 a month. When I finally called they said they will take it back down…. WHO WAS KEEPING THAT MONEY? And it kept happening until I cancelled the cable after 4 years and just kept the internet. It started at $58/month … last bill was 70 something. I’m done being robbed by Frontier. Not to mention when I moved I had to wait 9 days to get set up and when that day finally came , no one showed up. I called they… Read more »

Walter E Keasler
Walter E Keasler
9 months ago

Just noticed my bill was higher since renewing in Sept. I was hesitant with the new “no contract” pricing of month to month but I thought Frontier would be ethical in their dealings with long term customer. Wrong, bill went up $15 with no warning. Well the “no contract” cuts both ways I will be staying good riddance to poor service.

James Dan Dee
James Dan Dee
6 months ago

Who has similar service and better pricing? My rates keep going up, for no reason.

Tim smith
Tim smith
6 months ago
Reply to  James Dan Dee

Go to spectrum . they are very good even the top tech gave me his cell # and said call anytime .I was with frontier for over 20 years . I will tell you I had nothing but bad service .even my business phone went bad so bad I couldn’t even hear on it .o lost a lot due to them .even missed Dr.appt calls
.they wanted to charge me 109 +10 to disconnect

My modem was 12 years old . very slow .if they want There 119 I will see them in court .

Mike
Mike
1 month ago

Frontier keeps raising my monthly residential phone bill with unexplained fees. My bill for 1 land line, and 10mbs speed internet ( which frequently is inoperative) has gone up 25% in the past couple of years–all while quality of service (an oxymoron— more like failed to repair use), has worsened. This month’s bill had an additional $2.49 charge with NO JUSTIFICATION.
Sure wish the regulators would replace this firm with Verizon.

Valerie Lewis
Valerie Lewis
24 days ago

Um yep, I’ve been with Frontier for about 30 years now. I’ve made 3 or 4 moves (all within 10-15 miles)my latest(and last) move was 5/23/19-ever since that day my phone/internet bill has been completely messed up. Overcharged(not just the past 13 months but for numerous years(I’m disabled). After fighting with them for a year plus,I just hung my head in defeat I couldn’t go on,my health was being affected, so I said fine charge me what you think and I’ll pay it in installments but TURN MY PHONE/INTERNET BACK ON. Everything was great(well not all) finally got price down… Read more »

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