Frontier bags 75K fiber subs in Q4 2022, eyes ARPU gains in ‘23

Frontier Communications previewed its Q4 2022 results this week, revealing it reeled in 75,000 new fiber customers and 8,000 total broadband net additions. During an investor conference following the announcement, CFO Scott Beasley said growth spanned both new and existing markets and stemmed at least in part from gains made against cable competitors.

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.”

The operator doesn’t appear to be sweating 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. But Beasley said fixed wireless has had “very little impact” on its fiber gross additions.

On the copper front, he stated “we haven’t seen any significant impact from fixed wireless” 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.

It 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.