In an article published on Motley Fool, the author stated that Frontier Communications Corp (NASDAQ:FTR) is witnessing its acquisition plans play out favorably. Telecommunications specialist firm has taken several measures to expand its reach by acquiring assets from Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T). These initiatives were planned in an attempt to expand its network and identify different ways to enhance its efficiency.
The expansion plans
The writer stated that the latest proposed agreement to Verizon to acquire $10.5 billion in assets throughout Texas and Florida has many investors salivating. In fact, the investors are not paying any attention to the huge amount of debt that Frontier has to incur for closing the new acquisitions. The CFO participated in the Communacopia conference and provided some insights of their plans and the impact they will have on company’s operations in the coming period.
The CFO of Frontier said that whatever happened in Connecticut in 1Q2015 was not a promotion issue. He stated it as a philosophy that company had for its existing clients who are off-contract or approaching towards the completion of the contract, enabling them to get best-market pricing.
What expert says?
At the conference, Jureller highlighted some of the important things related to company’s operations. He said that prior to the first Verizon deal, the one-third of Frontier revenue source was residential voice revenue. However, the revenues concentration transformed from a secular declining business to become a lesser contributor of company’s success going forward. He added that the landline division is in declining stage, as many clients now opt for mobile service.
Frontier Communications Corp (NASDAQ:FTR) noticed the transformation and therefore shifted its focus on broadband Internet service, and that move played out extremely well with its acquisitions. By concentrating on higher-margin segments like residential and businesses broadband, the company can generate increased revenue from its increasing customer base and prevent negative impacts from leaving landline clients.