During the past few quarters, Frontier Communications (NASDAQ: FTR) has saw its subscriber numbers decline quarter after quarter. After a somewhat rocky acquisition of Verizon assets, the company has jumped back into the fold with their Vantage TV series. Frontier has also opened a retail store in Southern California, with more planned for the future. Frontier has managed to gain success by serving rural areas in the United States. The company will now attempt to battle the likes of AT&T, Time Warner Cable, and Google in North Carolina.
The new Vantage TV service will begin rolling out to Frontier’s North Carolina customers shortly. Thus far, approximately a third of the company’s North Carolina service area or 75,000 households have been switched over. The company has approximately 130,000 customers in the state of North Carolina. The Vantage TV service was launched as a pilot project in Durham in February of this year. The Vantage service is now offering in Durham, as well as small segments of Raleigh, Wake Forest, Creedmoor, Bahama, and a few other municipalities. The service has also been opened up to some consumers in Minnesota, Connecticut and South Carolina.
Frontier initially entered the North Carolina market in 2010 along with an asset purchase from Verizon. By rolling out the Vantage TV IPTV and broadband services in the state, the company will have an abundance of competition. AT&T has a huge presence in the state and the company is on the verge of launching their new DirecTV Now service. Timer Warner And Alphabet have also worked to expand to parts of North Carolina. Nonetheless, Frontier believes they can make headway in the state by offering competitive pricing.
Frontier offers bundled services slightly cheaper than AT&T. The company also offers a free Wi-Fi router in many cases. More importantly, Frontier has begun to offer big incentives for signing up for their bundled services. In the right circumstances, some new Frontier customers that opt to bundle their services will receive a $400 Amazon gift card. Others may be able to bundle to receive a prepaid Visa card. Frontier Communications desperately needs to right the ship and put an end to the aggressive customer churn.
As the old saying goes, one good defense is a strong offense. It is clear that Frontier intends to take follow such a concept with their recent decisions to venture deeper into North Carolina and into California. Frontier’s current service area is small compared to its bigger competitors. If they can strategically dip into the right areas, Frontier Communications may be able to expand without needing to pay for new customers. Their aggressive incentives and expansions should give hope to FTR investors.