Previously, it was reported that Frontier Communications (NASDAQ: FTR) had expanded to more than 25,000 new households in Texas. The company leveraged the FCC’s Connect America Fund and their own capital to make the expansion. Frontier has also taken steps to access more households in Indiana and Illinois. In the Indiana market, Frontier’s expansion will make broadband Internet available to 4,500 CAF-eligible households, as well as an additional 4,300 households throughout the state. In total, Frontier’s Internet service will now be available to an additional 8,800 Indiana families.
The company simultaneously took steps to expand in the state of Illinois. According to Frontier’s official press release, the Illinois expansion opened up 4,000 more CAF-eligible households to their broadband services. 3,000 non-eligible households were also added to Frontier’s Illinois coverage area. In total, the expansion bring more than 7,000 households to Frontier’s broadband service area. Frontier reported 4th quarter earnings, which shed a spotlight on customer churn. During the 4th quarter of 2016, Frontier’s high-speed broadband subscribers dropped 2.1%.
The company also recently revealed their intention to perform a reverse stock split. The move has already been approved by the Board of Directors and is currently awaiting stockholder approval. While the news of the reverse split sent the stock plummeting, the company has taken steps to improve their customer retention. By analyzing the company’s CAF-enabled expansions, they’ve increased their service base by as much as 40,000 customers. It should be noted that many of the areas impacted by the expansion were previously without access to broadband infrastructure.
Therefore, competition in these areas should not be a concern. This is a trend that is very common with the company. These expansions coupled with improvements to the company’s customer service could potentially offset the ongoing customer retention problems. The stock has a 52-week-high of $5.75 and a low of $1.92. The stock’s price currently sits at $2.14 per share. FTR could stage a rebound with a good quarter. Nevertheless, the impending reverse split may be enough to keep investors at bay for the present.