Frontier Has a 4Q15 Earnings Beat: Broadband Subscribers Surge (Part 3 of 5)
How Did Frontier Grow Its Broadband Subscribers Again in 4Q15?
By Ray Sheffer Feb 24, 2016 4:33 pm EST
Frontier s broadband subscribers
In the last part of the series, we saw that Frontier Communications (FTR1) revenue declined marginally by ~0.8% on a sequential basis in 4Q15. This was mostly driven by the company s voice revenue. Now let s look at the performance of the company in the broadband space.
As we can see in the above bar graph, Frontier s broadband customers increased ~4.3% YoY (year-over-year) to reach ~2.5 million in 4Q15. During the quarter, on a net basis, the wireline player added ~28,530 broadband customers. This net addition figure was ~27,155 in 3Q15. According to Frontier, it has witnessed robust broadband net additions for 12 quarters in a row at the end of 4Q15. According to the company, overall it has added ~346,000 broadband customers on a net basis from 2012 to 2015.
Frontier s market share of broadband
According to Daniel J. McCarthy, Frontier s chief executive officer and president, In the fourth quarter we once again increased our residential broadband penetration in over 75% of the markets we serve. McCarthy also highlighted Frontier s growth opportunities in the broadband space. He said, Currently our percentage of residential broadband penetration is only in the mid-20%s. Approximately 50% of broadband activity in Q4 was above the basic speed tier, up from nearly 40% in Q4 2014.
For a diversified exposure to telecom companies in the US wireline space, you can consider investing in the SPDR S&P 500 ETF (SPY3). SPY held a total of ~2.4% in AT&T (T), Verizon (VZ), CenturyLink (CTL4), Frontier Communications, and Level 3 Communications (LVLT5) at the end of December 2015. In the next part of the series, let s look at Frontier s Current Value-Centric Metrics.