Frontier Communications said today it is selling its broadband operations and assets in four rural-intensive states that have benefited greatly from the operator's participation in federal funding and grant programs.
While the operator faces criticism for not meeting some timelines associated with government monies, the condition of its rural deployments and the promise they hold for future return on investment most likely played a positive role in the deal.
As described in Light Reading, WaveDivision Capital and Searchlight Capital Partners have teamed to buy Frontier's broadband network and assets in Washington, Oregon, Idaho and Montana for $1.35 billion cash. Frontier's network passes 1.7 million residential and business sites, serving 350,000-plus customers, in this four-state region. Of these, about 500,000 are fiber-to-the-premises-capable, according to the service provider. At the close of its first quarter, Frontier's customer mix included 150,000 fiber broadband; 150,000 copper broadband and 35,000 video connections, the operator said.
Pinpointing Frontier's Federal Funds
This interactive map, created by USAC, shows Frontier's federal funding in Washington, Oregon, Idaho and Montana -- the four-state area covered in the acquisition deal with WaveDivision Capital.
(Source: CAF II map, Universal Service Administrative Co.)
Frontier is one of the nation's most active participants in Federal Communications Commission rural-broadband deployment programs. In January 2019, Frontier told the FCC it had met agency milestone in 27 states, but not CAF II's 60% interim deployment milestone in Nebraska and New Mexico, Benton Foundation reported. Frontier plans to bring coverage to more than 774,000 sites across 29 states, the FCC said.
Advancing on that goal, albeit slowly, the operator added approximately 10,000 locations in the first quarter, bringing the total to 406,000 locations, said Sheldon Bruha, senior vice president and interim CFO at Frontier, during the company's Q1 earnings call, according to a Seeking Alpha transcript. That slow rate was due to weather, Bruha added.
"Connect America Fund buildouts remain an important focus this year," said Bruha said. "We expect the pace will increase, now that we're into spring. We're also building fiber-to-the-home in certain rural markets to a total of 19,000 locations. We were leveraging state funding programs for these builds. Also, we continue to utilize fixed wireless broadband to fulfill some of our CAF requirements."
WaveDivision Capital's goal is to "bring better Internet connections to more homes and businesses throughout North America. We do this by providing investment and expertise to help companies enhance their infrastructure and deliver next generation broadband products," according to its website. Founder Steve Weed sold his prior business, Wave Broadband, last year to TPG Capital for more than $2 billion.
The lack of an accurate broadband map means states and counties are tackling this issue themselves – and sometimes finding big disparities in the data – before spending their residents' money on deploying infrastructure.
Years of investment in infrastructure and user-friendly tools make the difference in how operators act before and after natural disasters, even though Hurricane Dorian's impact on Florida was far less than originally forecast (thankfully).
The number and power of Britain's so-called altnets is growing, increasing access to fiber-based gigabit broadband for residents and businesses where incumbents such as BT, Virgin and Openreach did not deliver.
It wasn't long ago that TV was ranked by subscribers as the most important service in the bundle provided by their communications service provider (CSP). Recent research indicates that for nearly three quarters of subscribers, broadband is now the most important service. Broadcast TV is the most important service to only 15% of North American consumers, replaced by OTT video streaming platforms like Netflix, Amazon Prime and Disney+. In addition, many different competitors are moving aggressively to stake a claim in consumers' homes.
In 2020, CSPs need to fight back by transforming their business models, which are becoming more reliant on a single source of revenue: fixed broadband services.
This webinar will focus on helping CSPs transform their business models by placing a firm focus on delivering a sensational subscriber experience and by offering compelling new services that generate value for subscribers. These actions will reinforce the CSP's strategic position in the home network and position themselves for growth in the next decade.
Key topics include:
Being the first to market with WiFi 6 technology, in response to consumer purchases of new devices over the holidays;
Having the insights needed to proactively resolve issues, often before your subscribers even know that there are issues;
Providing help desk agents with the visibility they need to resolve common subscriber issues more quickly;
Delivering a mobile app, in response to consumer demands for the ability to do some things themselves, rather than having to call technical support; and
Addressing consumer concerns around device security, privacy and control with enhanced security and parental controls.
In this insightful Light Reading radio show, Kurt Raaflaub, Head of Strategic Solutions Marketing, will outline the key service provider challenges, deployment considerations, next-gen Gigabit technologies, and service models to win market share in the rapidly growing MDU market.