Frontier sees “tremendous headroom” in the broadband market, said John Jureller, Executive Vice President and Chief Financial Officer for the company, in a question-and-answer session at the UBS Global Media & Communications Conference in New York today. The company will grow that business by opening new markets and taking share from others through competitive offerings, he said.
Frontier’s broadband take rate throughout its footprint is in the low 20% range, but in some markets is in the 40% range, according to Jureller.
The company’s strategy for achieving growth is by “making sure we have the right reach . . . speeds and capacity,” Jureller said.
The company has spent capital on “building up” its network, which is now 89% broadband-enabled, Jureller noted. Nearly half (45%) of customers can get speeds above 20 Mbps.
“We probably have the second-largest fiber-to-the-home network of the major” telcos, he said. (The carrier with the largest FTTH network, many readers probably know, is Verizon – and Frontier achieved a substantial part of its FTTH footprint through its purchase of Verizon FTTH lines in several markets.)
For now, most Frontier broadband customers are taking service at 6 Mbps, paying $19.99 when purchased as part of a service bundle or $29.99 for stand-alone service, said Jureller. But 20% take service at higher speeds, paying $10 more for 10 Mbps service and $20 more for 20 Mbps service.
Jureller also noted that 26% of broadband customers purchase at least one Frontier Secure service and that he expects that percentage to increase moving forward.
According to Jureller, the company’s plan is to install fiber to 45% of the towers in its footprint. Another 40% are not targeted to receive fiber because “for us it wasn’t the right economic decision,” Jureller said.
The fate of the remaining 15% of cell towers is currently “up in the air,” he noted.
Fewer CAF challenges than some other telcos
Frontier apparently had fewer challenges from competitors than some other price cap carriers in the 2013 Connect America Fund program. Jureller noted that $58 million of the $72 million Frontier requested will be released to Frontier and that the company is “still working through” the fate of the remaining $14 million.
That’s about 19% of funding targeted for Frontier in the 2013 program – and as Telecompetitor reported Friday, price cap carriers on average received challenges for about 30% of the lines for which they requested CAF money for 2013.