Frontier increases fiber broadband reach and customer base while shareholders approve Verizon acquisition

Frontier's fiber broadband fortunes rose during the third quarter as the telco saw increased fiber broadband passings and overall fiber broadband customers.

These results came on the eve of Frontier’s shareholders approving Verizon’s acquisition of the provider.

During the quarter, Frontier added 381,000 fiber passings to reach 7.6 million total locations passed with fiber.

It also added 108,000 fiber broadband customers, resulting in fiber broadband customer growth of 19.3% year-over-year.

Consumer fiber broadband ARPU of $65.40, up 1.4% year-over-year.

However, Frontier remains challenged by legacy declines. The telco reported revenue rose 3.7% to $1.49 billion year-over-year as growth in fiber-based products was partly offset by declines in copper-based products.

Business, Wholesale uptick

Frontier’s fiber expansion also impacts the service provider’s business and wholesale segment.

In the third quarter, Frontier reported that Business and Wholesale revenue rose 7.6% year-over-year to $682 million, as growth in fiber was partly offset by declines in copper.

Like its consumer division, Business and Wholesale fiber revenue of $330 million increased 17.4% year over year, driven by growth in data and internet services.

The 4,000 net additions of Business and Wholesale fiber broadband customers resulted in growth of 9.5% year over year.

However, Frontier did see variance in customer churn and ARPU.

Business and Wholesale fiber broadband customer churn was 1.50% up from 1.24% in the third quarter of 2023.

However, the business and wholesale fiber broadband ARPU of $98.71 increased by 0.2% year-over-year.

Verizon acquisition on track

Frontier maintains that its sale to Verizon is set to proceed.

In September, Verizon announced that it would acquire Frontier. After gaining stockholder approval and fulfilling regulatory approvals, the telco expects the acquisition to be completed by the first quarter of 2026.

Frontier’s Board of Directors said, “The transaction with Verizon at $38.50 per share is the best outcome for stockholders.”

Frontier’s argument for being purchased by Verizon is that the company has faced pushback from various entities.

Proxy advisory firm Institutional Shareholder Services recommended Frontier shareholders to abstain from voting on Verizon's takeover bid and instead support the adjournment proposal.

"Given the possibility of substantially more value down the line, and the lack of urgency to approve a transaction ... it seems reasonable for shareholders to exercise the optionality of abstaining for the time being," ISS said in a Reuters article.

Following ISS’ recommendation, Frontier issued a statement that it disagreed.

Frontier’s Board of Directors said it “believes that Verizon’s all-cash offer of $38.50 per share is highly attractive and creates significant, certain value for stockholders, reflecting a 37% premium to Frontier’s pre-announcement price and an even more significant premium to all other measures of Frontier’s historical stock performance.”

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