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Frontier Loses Another 99,000 Users After Verizon Struggles

We've noted repeatedly how second-tier telcos like Windstream and CenturyLink have begun to more seriously bleed DSL customers. There's good reasons for the losses; outside of highly-selective key areas, these companies simply refuse to upgrade millions of these customers, many of which remain on decidedly last-generation DSL speeds slower than 6 Mbps. As a result, cable providers have been adding 99% of all net broadband subscriber gains each quarter, as DSL providers shift focus away from residential broadband and toward content/advertising or enterprise services.

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In terms of losses, Frontier Communications is no exception, the company's earnings indicating that it lost over 99,000 DSL customers during the third quarter.

A large number of these losses are thanks to the company's continued struggles with integrating Verizon's Florida, Texas, and California customers six months after acquiring the users from Verizon. Frontier's customer service systems simply weren't able to handle the influx of complaints, and even employees have lamented a culture of dysfunction, upselling and systemic bungling that plagues the telco.

While Frontier continues to insist there's simply no demand for gigabit service, like CenturyLink and Windstream Frontier struggles to deliver even the minimum FCC definition of broadband (25 Mbps) to a huge swath of customers. These frustrated users are seeing last-generation speeds accompanied by next-generation price hikes. As such, it's not really mysterious why these users continue to depart for greener and speedier pastures.

But on its earnings call, Frontier executives blamed everything but its own incompetence on the losses, including the fact that it marketed too much during a slow patch, and has been migrating more customer support back to the United States.

“This slower rate resulted because we began marketing during the seasonally slowest sales period, we on-shored our customer contact centers, which initially impacted our principal sales channel negatively and we resumed customer collection processes,” Frontier CEO Dan McCarthy said. “The last point began in the final month of the quarter and will have an impact in Q4 as well."

The CEO added that he believes that "legacy broadband net additions will be positive again in Q4, but it is too early to determine if they will be back to historic levels."

Except it's not too early to make that determination. When you refuse to upgrade your customers and don't scale your customer service quality and scope to handle massive acquisitions, these customers leave for cable. And customers will continue to leave for faster cable speeds until companies like Frontier, CenturyLink and Windstream either upgrade millions of neglected DSL users, or migrate to businesses they actually want to be in (might we recommend floral arrangements or wedding planning?).

Most recommended from 32 comments


tmc8080
join:2004-04-24
Brooklyn, NY

9 recommendations

tmc8080

Member

interesting

it's interesting to see that those states are now first becoming more competitive among incumbents.. Verizon sold out at the right time to avoid spending lots of money and then dumping it into wireless.

* can't wait until the other cellcos eat Verizon's lunch though and then they'll be left with a shadowy wire line footprint with pissed off wire line customers who they've neglected.

pjsutton
join:2013-06-25
Kempton, PA

9 recommendations

pjsutton

Member

Unnecessary bias towards Frontier...

This article was unfairly biased towards Frontier. Sure, it was a hot mess with the conversion ... but these areas were virtually neglected by Verizon for a decade -- even those with FIOS.

Frontier should get credit for actually attempting to offer higher speeds - way more people with Verizon DSL are stuck 3 Mbps. Frontier, I feel, at least tries to get people the highest speed they are able to sync with and generally seems to care about its customers.

Economist
The economy, stupid
Premium Member
join:2015-07-10
united state

6 recommendations

Economist

Premium Member

Have they lost them to their own services?

How many of these losses were upsells? Moving from DSL to FiOS would be a DSL sub loss would it not? As for demand for Gigabit, I would agree. For the vast majority of consumers, 30-50Mb is more than enough to satisfy their streaming needs. What consumers want is lower prices, or at least a woe-boy on the endless price increases. I am not convinced that all the $60 50Mb subs are going to embrace $90 Gigabit service, at least in the short term. Sure the nerds on DSLR do, but really, today, in this market, what are you doing with 1000Mb service that you could not do with a 50Mb or 100Mb service? A few years from now, sure, but today? Demand needs to precede supply and now there is nothing requiring anything close to 1000Mb service. This is a marketing argument I am making, not an anti-future-proofing one.

What would sell is $40 30Mb unlimited use service, not $90 1000Mb service.

Anon9d838
@tor-node.net

6 recommendations

Anon9d838

Anon

Frontier

Most people inside the company could see this coming from a mile away and to be honest its far worse then what was just openly reported. The senior management that has been brought in to run Technology and Engineering is a joke, no industry experience and too busy playing politics and hiring Windstream castoffs to actually fix anything.

Unfortunately, organizationally the CEO has swung and missed horribly to the point that many people within the company actually wish Maggie was still around because doing nothing is better than miserably failing and continuing to not recognize it.

Additionally the current corporate strategy of agressively deploying wireline video is preposterous yet the CTO and CEO are just fascinated by it (or trying to cover their rears for significantly overbuying content). Either way this company just insists on being a SLOW follower and repeating all of the same mistakes other ISP's have made (they must be betting against streaming).

Knowing Frontier, I'm sure the 1,000 layoffs will be mostly the wrong people (they didn't come from Windstream, are actively working on real issues or aren't playing enough politics) so naturally those would be the people this CEO's organization would choose to let go, the real worker bee's.

TIGERON
join:2008-03-11
Boston, MA
Motorola MG7550

6 recommendations

TIGERON

Member

More acquisitions coming in 2017

With the rest of Verizon's last mile fixed wireline in MA & RI as well as NY, PA, DE, MD, VA, NJ (am I missing any other still Verizon controlled wireline territories?) up for sale and the possible merger of Fairpoint, Frontier is not done growing yet. 2017 will be the year of AT&T, CenturyLink, Frontier and Windstream as they are also looking for more M&A. Just have to see which one will implode under the massive incurring debt.

Anon52e6e
@nortelnetworks.com

5 recommendations

Anon52e6e

Anon

It's not looking good...

"even employees have lamented a culture of dysfunction"

Frontier has chosen to hire inept and incapable subcontracted customer service representatives instead of hiring permanent, and yes unionized, staff. These temps have demonstrated no knowledge and little ability to problem-solve which is a sign that Frontier is not capable of training their people. You have to feel sorry for the customers who have to endure these people. Additionally, middle management continue to add roadblocks to efficiency and common sense preventing us from getting to a place where we aren't losing money. So much time (which is money) is wasted. Their motivations seem to be entirely selfish - perhaps trying to position themselves to not get laid off in the coming "synergy" cost cutting layoffs in 2017 and 2019 that are cited in the quarterly report. It's so dysfunctional you wonder if it's all intentional, with the goal to bankrupt at least a portion of the company any/or justify sending customer service jobs back to the Philippines and Mexico. And here's a secret: customer calls are still being sent to people in the Philippines.

Regarding CAF-II money taken from taxpayers, no matter what amount of money is invested in the network if customers can't get through the idiot customer service reps and lousy company processes to actually get the services they are asking for then the taxpayer doesn't realize any benefit whatsoever. What needs to be put under the microscope is executive compensation and how it may relate to those hundreds of millions of dollars in CAF-II money Frontier took from the government. Officials should eye exactly where that money is actually going (see Verizon's slight of hand trickery) and if executives are siphoning increasing amounts of money from elsewhere and filling the gaps with the CAF-II taxpayer money. Impending layoffs, obscene executive compensation, accepting taxpayers money and customer's seeing little to no benefit is a recipe for the need for scrutiny.
dsl2fios
join:2005-07-26
Santa Monica, CA

4 recommendations

dsl2fios

Member

awful service

This should never have been allowed to happen. Where were the regulators?! Oh thats right in Verizon's back pocket paid for by their lobbyists...
zod5000
join:2003-10-21
Victoria, BC

4 recommendations

zod5000

Member

I still don't get it.

The one thing pretty much everyone wants in the 21st century is a decent fast internet connection. The Telco's here in Canada might be expensive but they've been upgrading and keeping up. How do you let that cash cow fall by the weyside?
jazneo
join:2014-08-25
Hazel Green, WI

3 recommendations

jazneo

Member

i bet because Charter getting upgrade in area

i bet because Charter getting upgrade in area so people switching to charter
DrinkUpstate
join:2011-01-22
Leicester, NY

2 recommendations

DrinkUpstate

Member

Glad To Have Frontier DSL

Well I happen to be a Frontier DSL costumer and they have done lots of upgrades around here (RDSLAMs & back bone upgrades).

I have gone from a bad 6Mbps service that could not maintain 1Mbps in the evenings a year and a half ago to having a 12Mbps (with 24Mbps supposedly available) service that is solid 24/7.

I happen to live in what I refer to as a "Cable Free Zone" meaning the cable line ends about a mile away and will never be extended to my home. The concept that someone is going to bring fiber to my house when I can not even get the cable company to bring COAX is at best laughable.

So I am pretty happy that Frontier DSL is available. The 12 Mbps service with a nation wide unlimited phone line cost me $78 - which certainly isn't cheap but at least it works well.