AT&T (T) Inks Network Deal With Frontier Communications

AT&T Inc. T has inked multi-year agreements with Frontier Communications FYBR that will support the deployment of its 5G mobility network.

The telecom giant will also work with Frontier to bring fiber-optic connectivity to large enterprise customers outside its existing footprint.

Based in Norwalk, CT, Frontier offers a variety of services to residential and business customers over its fiber-optic and copper networks in 25 states. These include high-speed Internet, voice, video, and Frontier Secure digital protection solutions. Frontier Business provides communications solutions to small, medium, and large enterprises.

Together with Frontier, AT&T will be able to offer large enterprise customers high-speed, low-latency, and highly secure connectivity in markets where it does not own a fiber network.

AT&T is witnessing early momentum in its core market areas, driven by strength in 5G and fiber subscribers. Its shares have lost 4.6% in the past year compared with the industry’s decline of 2.5%.

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AT&T is building out fiber across its wired footprint and aims to reach nearly 2.5 million incremental customer locations by the end of 2021 and 30 million locations by the end of 2025. Its business fiber network offers high-speed connections to more than 2.5 million business customer locations.

In August, Frontier announced a new strategy to Build Gigabit America, with plans to deploy fiber to 10 million locations by 2025. It expects to make fiber available to 600,000 new locations in 2021. That would result in almost 4 million fiber locations by the end of this year.

This deal will enable AT&T to quickly reach additional locations by using Frontier’s fiber network. The companies will deliver high-speed connectivity to large enterprise customers within Frontier’s footprint.

AT&T will also use Frontier’s network to strengthen the deployment of its 5G network nationwide. It will tap Frontier’s Ethernet network to boost connectivity between cell towers and the core network.

AT&T’s network quality and go-to-market efforts will help it to drive subscriber growth trends. It intends to continue investing to deliver 5G capabilities for new use cases to its expanding customer base.

The stock currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader industry are Clearfield, Inc. CLFD and Viasat, Inc. VSAT, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.

Viasat pulled off a trailing four-quarter earnings surprise of 373.3%, on average.

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