Frontier Communications previewed its Q4 2022 results today, revealing it gained 75,000 new fiber customers and had 8,000 total broadband net additions.
- Strong customer growth in Q4 led Frontier to finish 2022 with 17% more fiber broadband customers than it had at the end of 2021.
- For the fifth consecutive quarter, fiber broadband customer additions outpaced copper broadband customer losses, resulting in 8,000 total broadband customer net additions in the fourth quarter of 2022.
During a Citi investor conference presentation following the announcement, CFO Scott Beasley said growth spanned both new and existing markets and resulted in part from gains made against cable competitors. “We continue to outpace our cable competitors, gaining share in nearly every geography we operate in. Our new position as the ‘un-cable’ provider is taking hold. We are bringing customers a superior product and it is paying off in record broadband customer growth.”
According to Beasley, the vast majority of its net additions are customers who are new to Frontier rather than those converting from a legacy DSL service. That means most either moved into or within the operator’s territory during the quarter or switched from cable. “We had success against every competitor in every geography,” the CFO stated. Asked whether cable’s recent efforts to woo consumers with fixed-mobile bundles presented a challenge, Beasley said Frontier hasn’t yet “seen much of an impact from their converged offerings.”
Frontier doesn’t appear to be concerned about advances from fixed wireless access (FWA) rivals either. New Street Research noted Frontier’s net add announcement implied it lost 67,000 copper subscribers, which was significantly higher than the 56,000 the analyst firm had expected. However, Beasley said fixed wireless has had “very little impact” on its fiber gross additions.
Regarding its DSL based services, Beasley said “we haven’t seen any significant impact from fixed wireless (FWA)” in terms of churn but acknowledged FWA is “nibbling around the edges” where new movers only have the choice between Frontier’s DSL or a fixed wireless product.
Beasley added despite macroeconomic challenges and a recessionary environment, Frontier hasn’t seen any slowdown in bill payments or tier step-downs from customers. In fact, as it works to achieve a goal of 3% to 4% year-on-year average revenue per user (ARPU) growth by the end of 2023, he said it will actually look to encourage customer plan step-ups. Beasley noted uptake of its gigabit plans currently stands around 15% among Frontier’s base and around 45% for new customers, leaving plenty of room for movement. The company will also implement “normal base price increases to reflect higher input costs” and use gift card promotions to retain and gain other subscribers, he said.
VP, Corporate Communications