Frontier hikes Capex to $1.8 bn focusing on fiber expansion

Frontier Communications said its fiber network will reach 10 million locations in 2025. Frontier’s fiber coverage reached approximately 157,000 new locations.
Frontier fiber coverage
Frontier said it expects to reach 600,000 new locations in 2021, resulting in approximately 4 million fiber locations passed by the end of the year.

“We’ve made real progress in executing our strategy – by adding world-class leadership, introducing a purpose-driven culture, improving the customer experience, and making our operations more efficient and sustainable,” Nick Jeffery, President and Chief Executive Officer of Frontier, said.

Revenue

Frontier has reported revenue of $1.62 billion for the second quarter of 2021, registering 7.9 percent decline, due to declining consumer copper subscribers and wholesale revenue.

Frontier’s data and internet services revenue of $839 million decreased slightly in the second quarter of 2021 primarily due to declining copper subscribers. Fiber broadband revenue was $268 million, a 13.6 percent increase, due to subscriber gains and higher ARPU.

Consumer fiber net adds were approximately 12,000 in the quarter, the eighth consecutive quarter of positive consumer fiber net adds, resulting in broadband customer growth of 3.3 percent relative to the second quarter of 2020.

Capital expenditures increased to $385 million in the quarter from $225 million in the second quarter of 2020, as fiber expansion initiatives accelerated.

Consumer Results

Frontier’s Consumer revenue was $826 million (–6 percent), as fiber revenue growth was offset by copper revenue declines and the impact of fresh start accounting.

Consumer customer churn was 1.54 percent, down slightly from 1.63 percent in the second quarter of 2020.

Frontier’s Fiber broadband revenue was $238 million, a 14.4 percent increase over the second quarter of 2020.

Frontier’s Fiber broadband customer net adds were 12,000, an increase over 8,000 net adds in the second quarter of 2020.

Frontier’s Fiber broadband customer churn was 1.53 percent, consistent with churn of 1.52 percent in the second quarter of 2020.

Frontier’s Fiber broadband ARPU was $63.10, a 10.9 percent increase over the second quarter of 2020, as customers continue to upgrade to faster speeds.

Business and Wholesale Results

Frontier’s Business and wholesale revenue was $707 million, a 9.5 percent decline from the second quarter of 2020, primarily due to proactive strategic repositioning with key business partners to reset pricing in exchange for higher win shares in the future and higher overall expected cash flow stability.

Frontier’s Business and wholesale broadband customer churn was 1.5 percent, a decline from 1.9 percent in the second quarter of 2020.

Frontier’s Fiber broadband revenue, excluding wholesale, was $30 million, a 5.6 percent increase over the second quarter of 2020.

Frontier’s Fiber broadband ARPU was $104.66, a 4.4 percent increase over the second quarter of 2020.

2021 Outlook

Frontier said Cash capital expenditures will be approximately $1.8 billion, higher than previous guidance primarily related to the company’s accelerated fiber build plans in 2021 and 2022.

Frontier said fiber build will reach at least 600,000 locations in 2021, up from previous guidance of 495,000 locations in 2021.

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