Frontier Exec: No Evidence Fixed Wireless Can Rival Fiber
By Ted Hearn, Editor of Policyband
Washington, D.C., Dec. 5, 2023 – A senior executive at Frontier Communications is confident that the company’s fiber deployment strategy can handle any threat posed by fast-growing fixed wireless access (FWA) providers.
Frontier Executive Chairman John Stratton, presenting Tuesday at the UBS Global TMT Conference, said FWA’s impact is barely being felt and bandwidth consumption patterns will work against the technology in the end.
“Fixed wireless has to date had very limited effect or impact on our overall operating results,” Stratton said. “We’ve seen virtually no sense for fixed wireless access in our fiber footprint. Period.”
Frontier has plans to pass 10 million households inside its footprint with fiber by 2025, hoping to achieve 45% penetration. Stratton said meeting those goals would result in $4 billion in EBITDA (a metric used to evaluate a company's operating performance) and $3 billion in free cash flow (funds available for dividends, stock buybacks and debt reduction.)
Consumers’ expanding reliance on the Internet for HD video, virtual reality and multiuser gaming services will require network capacity that FWA can’t supply, Stratton said.
“I don’t personally believe that fixed wireless access is a compelling proposition for consumers of bandwidth in the residential context,” he said.
On Monday, Comcast President Mike Cavanagh said he didn’t think FWA has the network capacity to compete over the long run, adding that the company was focused on competing fiber providers, who now cover about 50% of Comcast’s service territory.
Last quarter, the two major FWA providers – T-Mobile and Verizon – added about 900,000 subscribers combined. Frontier added 79,000 fiber customers but that was offset by the loss of 63,000 customers served by the copper-based digital subscriber line (DSL) technology.
Stratton said fiber’s advantage over FWA is the ability to serve the heaviest users of bandwidth in the home. He said the typical Frontier customer is using one terabyte of data per month. He called that “an unbelievably big number and it’s growing at a fast rate.”
Cavanagh said Comcast’s average broadband customer uses about 700 gigabits of data per month. Stratton disclosed that a subset of Frontier customers is consuming data at an even higher level.
“In fact, the top decile in our consumer base is now consuming close to 2 terabytes per month. This is sort of extraordinary and numbers I wouldn’t have imagined possible not even that long ago,” he said.
On other topics, Stratton said:
◼ Frontier is looking forward to participating in the $42.25 billion Broadband Equity Access and Deployment Program.
“It is fairly complex. There are thousands and thousands and thousands literally of jurisdictions that will make determinations about the release of funds… But I think it’s worth doing and this is something we expect to be very active in terms of our levels of participation.”
◼ Frontier has no immediate plans to bundle mobile service and fiber broadband.
“We have not yet seen evidence that our pure-play fiber position as we face the market has limited our ability to grow … Realistically speaking, the very best use of our capital that we have is to put every dollar we can into the conversion of our copper networks to fiber and then to drive hard on building and penetrating those markets.”
◼ Frontier is open to discussion about Jana Partners’ call for a strategic review of sale of the company.
“What I would say also is that we are very willing to explore all alternatives that may be present to achieve our number one objective, which of course is to achieve maximum value creation for our shareholders. Everything is on the table.”