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How Did Frontier Grow Its Broadband Subscribers Again in 4Q15?

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.

How Did Frontier Grow Its Broadband Subscribers Again In 4Q15?Enlarge Graph2

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.

References

  1. ^ FTR (marketrealist.com)
  2. ^ Enlarge Graph (marketrealist.com)
  3. ^ SPY (marketrealist.com)
  4. ^ CTL (marketrealist.com)
  5. ^ LVLT (marketrealist.com)