FTRCQ Frontier Communications Corporation Class B

Frontier Communications Exceeds 2017 Connect America Fund Milestone in California; Expands Broadband Service to More Than 275,000 Households Statewide

Frontier Communications Corporation (NASDAQ:FTR), California’s second-largest provider of wireline telecommunications, announced today that its expanded broadband service across California has exceeded 2017 federal Connect America Fund (CAF) requirements. Frontier’s overall public and private investment makes higher-speed Internet access now available to more than 275,000 Frontier-served households statewide.

These households include over 39,000 CAF-designated locations in Frontier’s service area that now have access to broadband with speeds of at least 10 Mbps /1Mbps, exceeding the CAF program’s 40 percent 2017 milestone for Frontier’s multi-year CAF deployment to 90,000 locations statewide. This CAF deployment also enables higher-speed service to thousands more nearby households, with speeds up to 115 Mbps to some locations depending on the physical distance from Frontier's nearest facilities.

“High-speed connectivity has become a necessity required to enable Californians to fully participate in today’s digital economy. Frontier is committed to serving California and expanding access to broadband to help close the Digital Divide,” said Joe Gamble, senior vice president of Operations for Frontier’s West Region. “Frontier’s participation in the CAF program is bringing $228 million in federal funds to California, enabling us to connect more of our customers and the diverse communities we serve to the life-enhancing benefits of broadband.”

In addition to its CAF deployment, Frontier — with private investment and grants from the California Advanced Services Fund — is expanding broadband service statewide, including service at speeds of 25 Mbps, to at least 100,000 additional households by year end 2017. Details will be reported to state regulators in coming months.

Overall, these upgrades to the company's network bring Frontier’s broadband offerings and bundled service packages to more than 275,000 households in 200 neighborhoods in nearly 100 cities and communities in 15 California counties. These include Colusa, Fresno, Imperial, Inyo, Kern, Kings, Los Angeles, Mono, Monterey, Riverside, San Bernardino, San Joaquin, Santa Clara, Tulare, and Ventura.

Broadband availability enables businesses and consumers to take full advantage of the benefits of internet connectivity including online education, healthcare, vital information resources and entertainment. The company is actively marketing its new and enhanced offerings that provide customers with more choices and affordable connectivity options. Interested consumers can call 1-855-901-4497 or visit https://internet.frontier.com/services to check availability and plan pricing.

Frontier’s CAF deployment with $38 million per year for six years is making broadband available to households in some of the most remote and sparsely populated parts of the state, from the Mojave Desert to the mountains of Northern California: locations where it is economically unfeasible to deploy broadband infrastructure without public support.

The California communities where Frontier’s expanded broadband service is now available include Arbuckle, Adelanto, Alpaugh, Anza, Apple Valley, Banning, Bieber, Big Pine, Big River, Bishop, Blossom Hill, Blythe, Boron, Clements, Corcoran, Crowley Lake, Desert Hot Springs, Dunlap, El Mirage, Exeter, Farmington, Forest Falls, Fowler, Gilroy, Havasu Landing, Helendale, Hemet, Hesperia, Homeland, Homestead Valley, Idyllwild, Independence, Indio, Inyokern, Joshua Tree, Lake Hughes, Lancaster, Lancaster Antelope, Lathrop, Lee Vining, Lemon Cove, Linden, Lindsay, Lone Pine, Los Gatos, Lucerne Valley, Mammoth Lakes, Manteca, Mecca, Mentone, Miramonte, Montebello, Morgan Hill, Morongo Valley, Mountain, Murrieta, Needles, Newberry Springs, Oasis, Olancha, Oxnard-Mantilla, Pacific Palisades, Patterson, Perris, Phelan, Quartz Hill, Rancho California, Ransburg, Redhawk, Reedley, Ridgecrest, Ripon, Salton City, San Bernardino, San Jacinto, Sanger, Thermal, Thousand Oaks, Tivy Valley, Trona, Weaverville, Window Rock, Wrightwood, Yermo, Yucaipa, and Yucca Valley.

About Frontier Communications

Frontier Communications Corporation (NASDAQ:FTR) is a leader in providing communications services to urban, suburban, and rural communities in 29 states. Frontier offers a variety of services to residential customers over its fiber-optic and copper networks, including video, high-speed internet, advanced voice, and Frontier Secure® digital protection solutions. Frontier Business offers communications solutions to small, medium, and enterprise businesses. More information about Frontier is available at www.frontier.com.

EN
02/01/2018

Underlying

Reports on Frontier Communications Corporation Class B

Vikash Harlalka
  • Vikash Harlalka

FYBR Quick Hit: ABS debt priced

Frontier announced pricing for its latest ABS debt this afternoon, raising $750MM. The offering consists of $530MM Class A-2 notes at 6.2%, $73MM Class B notes at 7.0%, and $147MM Class C notes at 11.2%. The average cost of debt is 7.4%, which is in-line with our expectation, and ~140bps lower than their last ABS debt issuance. These new tranches of debt have an anticipated repayment period of 7 years (vs. 5 years on the last issuance).

Jonathan Chaplin
  • Jonathan Chaplin

FYBR: Cash flow in steady state

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Jonathan Chaplin
  • Jonathan Chaplin

ACP Part V: FCC releases survey results

The FCC released a survey that included more than 5,000 ACP households today. The FCC repeated the mistake of prior surveys by asking whether households were new to broadband with ACP as opposed to subscribers that are new to broadband with one of the subsidy programs that followed the pandemic (stimulus checks; EBB; ACP). They also asked the important question, which is “what will you do when ACP ends”. Our quick analysis here focuses mostly on the social costs of ACP going away. We will ...

Jonathan Chaplin
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FYBR: updating capex and funding through 2026

The Company’s new Capex disclosure provides a clear map for cash capex for the fiber project for the remainder of the 10MM location plan, which will take them into 2026. Stronger confidence in the capex trajectory for the next three years lends confidence to the FCF trajectory and funding requirements (we have eliminated a variable). This should make it easier for investors on the sidelines to underwrite the investment case.

Jonathan Chaplin
  • Jonathan Chaplin

Frontier Model Update

This note focuses on changes to the model following 4Q23 results. Earlier today, we published a review of results and additional thoughts following the earnings call. Our net adds, revenue and EBITDA are slightly higher. Capex and FCF burn are also higher. Our long-term thesis remains unchanged. Price target is $54.

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