Frontier CEO Nick Jeffery provided an update to investors today at the Goldman Sachs Communacopia & Technology Conference, and it’s quite clear, Jeffery is a fiber fan. He might be the fiber industry’s biggest cheerleader and he doesn’t seem too concerned about a DOCSIS 4.0 competitive threat.
Jeffery outlined Frontier’s “Gigabit America” strategy which aims to bring fiber to 10 million locations by 2025. He reports that the company is well on its way to achieving that goal, with much of it coming at the expense of his cable competitors.
Jeffery noted record growth in net adds for fiber over the past several quarters, and when asked where those new fiber customers are coming from, he cited taking broadband share from cable competitors as the largest contributor.
“It’s very, very clear that we are taking the majority of our customers from cable, no doubt about that,” he said. “It’s clear that when fiber turns up in your neighborhood it’s the best alternative, so we’re doing really, really well against cable.”
Jeffery is all in on fiber. “Fiber is a fundamentally better product than cable,” he said “It’s fifty times faster at the 2 gig level on the upload, it’s eleven times faster on the download, it’s two-and-a-half times better latency.”
DOCSIS 4.0 Competitive Threat
The cable industry does recognize its Achilles heel against fiber, mainly its inability to match upload speeds with fiber. The industry’s 10G initiative aims to fix that, and DOCSIS 4.0 is a key aspect of it.
The DOCSIS 4.0 competitive threat includes symmetrical multi-gigabit capable service that cable companies will soon be able to offer. Comcast just outlined its path to get there.
Jeffery doesn’t seem overly concerned. He did give the cable industry its props for building a hugely successful broadband business, but he now sees major headwinds for cable and is positioning Frontier to take advantage.
“Historically they’ve done an amazing job here in the states at building a very strong market position,” he said. “Unquestionably so.” But the move to DOSCIS 4.0 has major problems, he suggested.
“[It’s] a hugely capital intensive program that will take many years to roll out at scale and even when it does, the end product is still worse than fiber is today,” he said. “Frontier’s fiber network is 10 gig capable end to end today, to the home.”
Jeffery has some room to flex muscles. Luckily for him, he’s been given the keys to a brand new Frontier, which shed billions of dollars in debt through bankruptcy, and installed an entirely new executive management team and board. He’s been given an edict to clean house and focus on building fiber. Not a bad position to be in.
He freely admits that Frontier has a checkered past. “Frontier did not have a great reputation in the past and we fully acknowledge that,” he said today.
But that was under the old regime. For now, Frontier sees shiny fiber days ahead with a bullseye on cable competitors. Time will tell if Jeffery and Frontier can truly put that past behind it and successfully fend off the coming DOCSIS 4.0 competitive threat.
