Markets

Frontier Communications Corporation's Best Business Segment in 2015

It's hard to find any good news in the three quarters Frontier Communications has reported on so far this year.

The company has been bleeding residential and business customers while also steadily losing video subscribers in each quarter. While that was happening, Frontier's stock was moving steadily downward.

The past 12 months were not kind to the company. And while the moves it made during the the year may help it next year -- specifically, improving its integration of the customers it purchased from AT&T and closing a deal to buy some systems from Verizon -- that was probably little solace to investors in 2015.

Even the company's best-performing business segment was just OK. Frontier steadily added broadband customers every quarter, but the numbers were, on a percentage of customers added, in the middle of the pack.

They weren't bad, and the broadband adds give the brand something positive to build on as it heads into 2016.

Frontier's stick chart for 2015 was not pretty. Source:

YCharts.com.

Some good news from broadband

While cord cutting has caused many cable companies to lose pay-television customers, the byproduct of that phenomenon is that more people need high-quality Internet connections. If you want to ditch cable and replace it with streaming services, you need broadband Internet to make that happen.

That has been a saving grace for the pay-TV industry, but some companies have done better than others. Frontier is still a small player in the broadband world. It closed 2014 with 2,342,500 customers, according to data from Leichtman Research Group (LRG). That puts it well below major players including Comcast (21,962,000), Time Warner Cable (12,253,000) and the telephone companies it has been buying system from AT&T (16,028,000) and Verizon (9,205,000).

Company 2014 Close Q1 Q2 Q3 Total % Change
Comcast 21,962,000 407,000 179,000 320,000 906,000 4.12%
Time Warner Cable 12,253,000 328,000 189,000 246,000 763,000 6.22%
AT&T 16,028,000 69,000 (136,000) (129,000) (196,000) (1.22%)
Verizon 9,205,000 41,000 -25,000 2,000 18,000 0.19%
Frontier 2,342,500 17,000 29,000 27,000 73,000 3.11%

Source: Leichtman Research Group.

On the positive side, while Frontier can't match the numbers the two largest cable companies put up, even on a percentage basis, it did outperform the telcos that LRG groups it with. That success is largely because AT&T and Verizon have been gaining subscribers for their fiber services -- which compares with what Frontier offers -- and losing them in DSL.

Something to build on

Consumers clearly want top-tier broadband, and Frontier's service meets those standards in most cases. That's good news for the company, which will more than double in size on a customer basis when its deal with Verizon closes, probably in March.

Frontier and its rivals are going to lose cable customers, and it's logical to think they will lose traditional phone customers even faster. To remain viable, that means adding broadband customers at a steady clip.

In a bleak year, Frontier showed that it could do that. That wasn't enough to save its 2015, but it might be something that helps it rebound in 2016.

3 Companies Poised to Explode When Cable Dies

Cable is dying. And there are 3 stocks that are poised to explode when this faltering $2.2 trillion industry finally bites the dust. Just like newspaper publishers, telephone utilities, stockbrokers, record companies, bookstores, travel agencies, and big box retailers did when the Internet swept away their business models. And when cable falters, you don't want to miss out on these 3 companies that are positioned to benefit. Click here for their names. Hint: They'renot the ones you'd think!

The article Frontier Communications Corporation's Best Business Segment in 2015 originally appeared on Fool.com.

Daniel Kline has no position in any stocks mentioned. He was one of those people who added Frontier broadband in 2015. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

T VZ CMCSA

Other Topics

Stocks

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More