Frontier Communications Corp (NASDAQ:FTR) has made impressive strides as it tries to become a key player in the wireless business having been in the shadows for years. The acquisition of Verizon Communication Inc. (NYSE:VZ) wireless asset in Florida, Texas and California appear to have rejuvenated its prospects in the industry.
Thanks to the $10.54 billion acquisition, Frontier Communications is now considered a mid-tier player in the Pay TV and ISP business, given the number of customers it services on a daily basis. With the acquisition, the company now boasts 3.3 million voice connections, 2.1 million broadband customers as well as 1.2 million FiOS video subscribers in the three states alone.
Becoming big is any company dream. However, being able to sustain and suppress the pressure that comes with such operations always define a company’s future. Frontier Communications now faces almost double the amount risks it faced prior to the acquisition.
Risks To Growth
Logistical challenges in meeting the needs that come with customers moving from one platform to another could define the company’s growth prospects. The biggest challenge at hand is successfully holding on to customers who came with the Verizon assets acquisition. How successful it will be on this front will significantly determine whether its $10.5 billion acquisition was the right call.
Telephone and internet outages in the three states should be outdated if the company is to prevent mass exodus of customers from the network. Tough times will always be there but how well the company navigates them while keeping customers happy will determine its destiny.
Keeping shareholders happy in addition to customers will have a huge say on Frontier Communication prospects in the highly competitive business. Its 9% dividend yield needs to stay intact if the stock is to continue enjoying positive sentiments on the street. Even though the company has done enough to reassure investors, it is not considering any cuts, cuts in the past could spook some investors.
Frontier Communications Corp (NASDAQ:FTR) needs to keep shareholders and customers happy if it is to have a chance of rivaling the big boys in the industry. The same will also have a huge say on the amount of growth it will achieve at the back of the hefty acquisition.