A new Frontier CEO was announced today as part of a post-bankruptcy plan for the company. Nick Jeffery will join the company, effective March 21, 2021.
The new Frontier CEO comes from Vodaphone UK, where he served as CEO. Vodaphone UK is one of Vodaphone’s largest operating units, providing wireless and wireline operations in the UK.
Jeffrey will succeed Bernie Han, as a part of Frontier’s restructuring process. Han was appointed CEO in December 2019. The company expects to emerge from bankruptcy in the first quarter of 2021.
The company’s restructuring plan has been approved in 12 states. Frontier’s restructuring will remove about $11 billion in debt and reduce its annual interest expense by $1 billion, according to the company.
The new Frontier CEO will have a lot to do. Frontier is aiming to transform itself from a largely copper-based, low performing broadband network operator with a poor customer service track record to a fiber-broadband driven, high-performance network.
When it entered bankruptcy, Frontier reported over half of its revenues (51%) came from residential services, and most customers were DSL based. The carrier passed some 14 million homes across its footprint, but 11 million could only access DSL. Sixty-five percent of those homes passed could only get speeds of 24 Mbps or less.
Frontier reported 2.6 million residential broadband subscribers, or a penetration of roughly 21%. Over half, or 53%, subscribe to that slow DSL.
Transforming that network to FTTP will be challenging and expensive. Debt reduction and lower interest expense will certainly help. RDOF winnings should help as well, with Frontier securing $371 million from the recent rural broadband focused RDOF auction.
But the new Frontier CEO will face resistance, given its track record. One example is one of West Virginia’s senators, Republican Shelley Moore Capito, is expressing concern about Frontier’s RDOF winnings.
Frontier won $247 million to serve close to 79K locations in West Virginia. Frontier aims to bring gigabit service to many of those locations. Capito is skeptical that Frontier will deliver and has asked the FCC to scrutinize Frontier’s long-form RDOF application as a result.
“Furthermore, Frontier has a documented pattern of history demonstrating inability to meet FCC deadlines for completion of Connect America Fund Phase II support in West Virginia,” Capito wrote in a letter to the FCC. “The inability to deploy federal funds in a timely fashion to make improvements to a network delivering broadband service at speeds of 10/1Mbit/s or higher should raise significant concerns about their capacity to build out a network delivering 100 times that level.”
On the bright side, the company reported in the press release about the new Frontier CEO that it has had 5 straight quarters of positive consumer fiber broadband net adds. It also intends to recruit a “world-class team to lead the Company forward under its new owners post emergence.” Given all of these headwinds, it will need it.