Frontier Loses $80 Million After Verizon Wireline Cutover

Business and residential customers in California, Florida and Texas filed more than 1,100 complaints against Frontier after the switch.

Edward Gately, Senior News Editor

August 2, 2016

1 Min Read
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Frontier Communications reported an $80 million loss for the second quarter, its first quarter since taking over Verizon’s wireline operations that provide services to residential, commercial and wholesale customers in California, Florida and Texas.

Frontier took over the wireline operation in those states on April 1. With the $10.5 billion acquisition, Frontier doubled in size as the nation’s largest rural phone company. Business and residential customers in California, Florida and Texas filed more than 1,100 complaints against Frontier after the switch.

Frontier gained more than 2.3 million residential customers and 250,000 business customers from the Verizon acquisition. Also, it gained 2.16 million broadband subscribers and 1.2 million video subscribers.{ad}

Dan McCarthy, Frontier’s president and CEO, said his company is “essentially done” with the absorption of Verizon clients and that there may be “some lingering small things, but nothing that should rise to creating the noise that we saw when we first cutover.”

Following the acquisition, the larger Frontier saved $1 billion in operating costs through the integration last quarter, nearly double the target of $525 million, he said.

“Turning to the commercial segment in the new markets, we have begun to implement our plans to build our direct and indirect commercial sales channel strategies,” he said. “We expect to see traction in these channels in the fourth-quarter time frame.”

The Q2 loss compares to a $28 million loss for the second quarter of 2015. Revenue totaled $2.6 billion, up from $1.37 billion for the year ago quarter.

“With the doubling of our size, Frontier now has the scale, technology and diversification to realize significant opportunities across our newly expanded footprint,” McCarthy said.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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