Home» New Frontier aims to become the largest pure optical fiber supplier in the United States

As the company officially emerged from bankruptcy and held its first quarterly earnings conference call, a new frontier was born. A clear message appeared in the conference call, Frontier executives outlined a way forward, aiming to make Frontier the largest "business-only" fiber broadband provider in the United States

Purely a game, I think Frontier means you can’t count AT&T and Verizon, both of which have more than 5 million fiber users. But they all have a huge wireless business, and my guess is based on Frontier's definition, which excludes them from "pure" fiber companies. By this measure, with 1.3 million existing Frontier fiber optic users, it may have achieved the goal of the largest "play-only" fiber optic supplier in the United States.

In terms of the total number of fiber optic users, its closest competitor may be Lumen/CenturyLink. It did not disclose the actual number of fiber optic broadband users, but the total broadband users exceeded 4 million. TDS may rank third, with 307K fiber broadband users (as of the end of 2020).

Frontier went all out, and this is an important theme that recurred in today's conference call. Part of this strategy is to convert many of its existing DSL customers to fiber. Frontier currently has 11.8 million locations that can be served via DSL and more than 1.5 million DSL customers.

Frontier is also expanding its fiber optic footprint. It added 200K of new fiber passes in 2020, and plans to add another 600K before the end of 2021. Frontier's fiber penetration rate is currently 41.5%, and the goal is to reach 50%.

Ultimately, Frontier believes that the company's total fiber optic opportunities will exceed 13 million locations. The company is already building another 3.4 million locations and has identified 6.7 million locations as "assessment opportunities." The company is planning to hold an investor day in August to further outline its fiber strategy.

Frontier Executive Chairman John Stratton said on today's conference call: "We are currently evaluating the next level of opportunity and the speed at which we can complete the entire construction in a strategic evaluation." "We recognize that time to market is absolutely critical. Success factors."

If Frontier achieves a 50% fiber penetration rate, it believes it will create an enterprise value of US$18 billion for the company. It claims that today's enterprise value is 15 billion U.S. dollars. Frontier cited its 7 consecutive quarters of net fiber broadband increase as evidence that the fiber strategy is working. It reported that it added 11,000 fiber optic users in the first quarter of 2021.

There is still a lot of work ahead of Frontier. Its fiber strategy is logical. But it has a tradition of poor execution and poor customer service that needs to be overcome. This is the reality acknowledged by its new CEO Nick Jeffrey.

He said: "When I joined Frontier, I was very aware of the problems the company was facing over time, and I was eager to make changes to help improve execution and make smart investments in the future."

Jeffrey's task is to make an ambitious plan. He has done this before. In the UK, Vodaphone transferred to a communications company, and both he and Stratton mentioned this experience in today's conference call. He showed a confident tone and pointed out that he was forming a team to achieve his goals, including hiring Veronica Bloodworth from AT&T as Frontier's chief network officer. Bloodworth is responsible for overseeing AT&T's fiber optic expansion as senior vice president of construction and engineering.

"Frontier's goal is to become a leader in building Gigabit America," Jeffrey said on today's conference call. "We will connect more rural areas, upgrade our lower network speeds, make high-quality Internet more accessible, and play our role in providing the United States with the digital infrastructure needed to succeed in the coming years."

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