On Jul 4, we maintained our Neutral recommendation on
Frontier Communications Corporation
). The company's enhanced broadband deployment, new product
offerings and business segment restructuring are expected to
boost its operational level. Nevertheless, the company faces
several headwinds that may impede its long-term results going
forward. This rural communication service provider holds a Zacks
Rank #3 (Hold).
We believe that Frontier Communications is poised to benefit form
customer retention measures, market share gains, broadband
expansion as well as better sales and marketing initiatives.
Further, it targets the restructuring of pricing plans to fuel
customer accretion through value-for-money offers. To address the
rising demand for customer service in a rapidly growing wireless
market, Frontier has also introduced a range of technical support
services that work round the clock and throughout the year.
Frontier Communications continues to offer attractive packages of
value-added services to its customers. The company has rolled out
wholesale carrier Ethernet services in 23 out of the 27 states
where it operates. The unique service will increase users'
bandwidth with the aid of software thereby curtailing expenses
and improving customer experience.
We remain optimistic on Frontier's collaborations with other
companies such as
) to offer differentiated products to complement customers'
needs. The company has allied with various SMEs, educational
institutions and hospitals to promote its CPE (customer premises
equipments) that contribute approximately 9% to its revenues. The
company's latest deal was with a major technology protection
company - Asurion. Through this transaction, Frontier Secure
extends extensive equipment protection to residential and small
However, we stay on the sidelines considering the regulatory and
competitive pressures along with high expenditures on promotional
activities plus access line losses that are expected to strain
the company's performance level.
The second and third quarters of 2013 have the Zacks Consensus
Estimate for earnings pegged at 6 cents per share. This reflects
year-over-year decline of 30.7% for the next quarter and 16.9%
for the third.
Companies operating within the telecommunication sector that are
worth taking note of include
Alaska Communications Systems Group Inc.
) - that holds a Zacks Rank #1 (Strong Buy) and
Consolidated Communications Holdings Inc.
) - that carries a Zacks Rank #2 (Buy).
ALASKA COMM SYS (ALSK): Free Stock Analysis
CONSOL COMM IL (CNSL): Free Stock Analysis
FRONTIER COMMUN (FTR): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
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