 cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5
 ·Frontier FiOS
| reply to spivver
Re: At the end of the day, it's probably a good deal said by spivver:It's obvious the end game is not to try to survive, but rather spin off the rural parts of Verizon, get rid of the debt via bankruptcy, and then after that's all cleared up, the cash flow becomes available to invest in rural broadband. You're correct right up to the "the cash flow becomes available..." part. How does Frontier expect to make wheat from Verizon's chaff? |
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Reviews:
 ·WOW Internet and..
| when they file bankruptcy the debt goes away-well most of it. they'll come out a head and go on as planned.
but why are people on here saying Frontier will fall just as the other two?
For one, HI Telcom was bought by a private investment company. What happened to them investing in what they bought? Also Fairpoint is much much smaller than Frontier.
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www.twopugsbrand.com Kosher, Vegan, and Organic Certified Dog and Cat treats/foods and other products! |
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spivver
join:2007-07-15
Manchester, NH
1 edit | reply to cdru
said by cdru 
You're correct right up to the "the cash flow becomes available..." part. How does Frontier expect to make wheat from Verizon's chaff?
When you no longer have massive debt payments, that frees up that cash to spend on investment activity. Bankruptcy restructures or even gets rid of completely that debt to reduce or eliminate the payments. |
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cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5 Reviews:
·Frontier FiOS
| said by spivver:When you no longer have massive debt payments, that frees up that cash to spend on investment activity. Bankruptcy restructures or even gets rid of completely that debt to reduce or eliminate the payments. Yes I'm well aware of how bankruptcy can help out...in theory.
Take the whole debt thing out of the picture. Why is the real reason Verizon wants to get rid of the "rural" markets? It's either not profitable, or at least not as profitable as they want. Verizon doesn't want to subsidize their western territories with their more profitable eastern ones. They know that they need to invest a ton of money in a VERY LARGE area and they don't want to shell out that cash long term.
If Verizon doesn't want the territory because it basically costs them money, how is Frontier suppose to make it work? Frontier doesn't have customer bases like Verizon's east cost, Texas, or California operations that they can pull operating funds from to help balance the cash flow. They may be able to operated existing infrastructure, but do you REALLY think that they will have the capital to expand services to it's new "rural" customers? If they can't do it now for all of their existing customers, how are they going to do it when their customer base more then doubles and footprint I believe triples? |
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Reviews:
 ·Frontier Communi..
| Don't forget the 2000 merger(of Bell Atlantic and GTE) that established Verizon!
Verizon is, in effect, now cherry picking among the old GTE territory. They're keeping Southern California, Texas, and Florida. Then discarding the rest in this Frontier deal.
Good point on your last paragraph about the $, similar point made by the Illinois Adm Law Judge in her finding. Frontier's bond ratings are considered junk bond status. Verizon bond ratings much better. Frontier's stock dividend yield is 12.7%. In current environment, that is not sustainable. |
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