Frontier's customer exodus continues as frustrated DSL customers -- tired of last-generation speeds -- continue to flee to cable competitors. Frontier's first quarter earnings indicate that the telco lost another 102,000 DSL subscribers in the quarter, 64,000 of which were in the California, Texas and Florida regions acquired from Verizon. Frontier epically mishandled the acquisition, resulting in consumer frustration that's still being felt today. But Frontier also lost 28,000 subscribers in its legacy footprint.
Frontier continues to blame much of the loss on a "new collection process" (read: these were credit-challenged customers we didn't want anyway).
"I hate to lose any customers, but we had a significant segment of the customer base that was on deeply discounted offers," Frontier CEO Dan McCarthy claimed on the company's earnings call. "We've been focused on improving the profitability of the segment, and in the process, we naturally lose some customers."
But that explanation tries to obfuscate that many Frontier customers are leaving because the company still refuses to upgrade older DSL lines at any real scale, leaving many users on 3-6 Mbps DSL that falls well below the base definition of 25 Mbps. Cable providers have been having a field day in these markets as DOCSIS 3.1 now allows them to offer gigabit speeds for relatively little investment.
Even many Wall Street investors, typically too impatient to wait for ROI on network upgrades, think Frontier is really lagging when it comes to modern connectivity.
McCarthy did say the company will "continue to execute on our copper upgrades, as well as make select upgrades in markets around the country on our copper plan."
Of course it's those highly selective upgrades that are the problem in the first place. Still, McCarthy also stated the telco plans to expand its use of G.fast technology to try and offer faster speeds to apartment complexes and other MDUs (multiple-dwelling units).
“We will be deploying G.fast technology in MDU applications, providing a highly competitive offering for that segment," McCarthy said. "Our first application was in Connecticut, and we are pleased with the performance and looked at to move that more widely into production in attractive markets."
But Frontier took on so much debt acquiring Verizon's unwanted customers, they lack the resources to upgrade at the kind of scale that's needed to truly compete with cable. And in other markets Frontier faces so little competition that upgrading customers simply isn't a priority. Neither of these facts will change anytime soon, meaning Frontier's losses will likely continue.