Verizon snaps up Frontier in $20B fiber power play

Verizon is buying Frontier Communications for $20 billion in an all-cash deal that the Tier 1 carrier says will bolster its fiber network across 31 states and Washington DC, as the industry undergoes yet another round of telecommunications consolidation. The deal aims to bring together Frontier's pure-play fiber business and …

[isdnip]

Did they get back what they sold for less than they sold it for?

Frontier's main purpose in life for the past decade or so has been to take over properties Verizon didn't want, many being money-losers outside of prime areas. And Frontier's other territories are mostly rural, but don't get the huge subsidies that a rural pure play carrier is entitled to. So is Verizon just buying back stuff it sold before at a higher price, with Frontier's shareholders essentially making a donation to Verizon's coffers? I'd be interested in seeing the numbers.

[IvyKing]

Re: Did they get back what they sold for less than they sold it for?

I wouldn't put it past Verizon's manage to pull off that kind of a stunt after spinning off their directory publishing subsidiary loaded with a metric buttload of debt.

My take is that Verizon is seeing that their wireless revenue is plateauing and noticing that fiber optic revenues are increasing as people are ditching cable. One other benefit is that subscriber churn is less when customers have both a fiber and wireless through Verizon.

Much of the telco assets Verizon sold to Frontier were former GTE assets.

[Pascal Monett]

So, 2 million more customers

I have trouble finding out if Verizon is a reliable, trustworthy company. I found this article that states that, in 2008, Verizon was ranked #1 for wireless service, but when I google "Verizon reputation", I find scores of posts and web pages citing unhappy people and issues with either their connection or the help they (do not) get from Verizon.

Apart from the shenanigans of buying back what they got rid of years ago, I'm just wondering if this is a move that will actually make things easier for people in the long run (I couldn't care less about if it makes things better for the Board).

[isdnip]

Re: So, 2 million more customers

Verizon is really run like two companies. One, known internally as Verizon Core, is the old telephone companies. The other is Wireless. Core has been starved of investment for years. It did have a burst of FiOS investment in the aughts, but since then corporate has been run by Wireless types who see Core only as a way to provide fiber for their cell sites.

Frontier started as the old Rochester Telephone, then merged with Citizens Utilities, which had rolled up a lot of rural telcos. Verizon bought GTE in 1998 but mostly wanted its wireless assets, and most of its wireline assets got spun out, with Frontier often the buyer. Those wireline assets tend to be in bad shape.

[M.V. Lipvig]

Re: So, 2 million more customers

I used to work for them as a circuit tester, and at least when dealing with my department people received excellent service. Then they laid me off and sent my job to the Phillipines. Today I occasionally have to work with those who took my job and trying to get stuff done with them is a nightmare. It now takes days to do what I did in hours with most of that time involving a tech driving somewhere.

No mistake though, this is not a case of "they laid me off so they suck." I was actually pretty happy they laid me off. They sent me off with a rather nice severance package that involved a year of free medical coverage and a rather large sack of cash, and I had another job paying more not long after.

Oh, and they're run like three companies. There's the Local side that you call Core, Enterprise which is all their national stuff like legacy MCI (the part I worked for) then there's the Wireless part.

[sjb2016reg]

Does it actually harm competition?

Telcom/Internet provision is a joke in the US. Most areas have a legally sanctioned monopoly cable provider and a monopoly phone company, so your choice is between those two options alone. The article states that Verizon buying Frontier will reduce competition, but were they actually in competition? Seems that more likely (in most areas) that Frontier was the locally sanctioned phone company monopoly, and Verizon is now just taking over those customers. I could be wrong, but that's what is more likely happening (mind you, I haven't lived in America for over 20 years, so maybe things have changed, but my mother in upstate NY certainly still has a choice of one cable company or one phone company for her phone/internet needs).

[Kev99]

We unfortunately had Frontier where we used to live. They claimed they couldn't provide decent internet service because of the wiring. Funny, where we lived before did just fine with POTS wiring. Anyway, the central office ordered the routers to be choked so we never got the full speed promised. We were also told Frontier had no intention of upgrading our service nor accepting any federal rural internet grants to do an upgrades. To add insult to injury, AT&T had laid fiber to the local air park which was just a mile away but kept dark. Customer service was non-existent. We had a service call and the tech went to the wrong house and declared we had no problems. Bottom line. I pity the fools at Verizon who have to clean the Frontier mess.

[Grumpy Fellow]

Comparing my Frontier and Verizon service

I've got Verizon FIOS Internet service at one location and Frontier fiber optical Internet service at another.

When Frontier came out to install, the job was done in about 30 minutes, throughput was amazingly fast, and the tech seemed like family by the time he left. He gave me his business card and said to call him direct any time if there was an issue.

When Verizon came out to install my neighbor's service in the Verizon service area the tech just gave my fiber connection to the neighbor and disconnected my house. When I finally got a repair crew out two weeks later, that tech said that the Verizon installation techs save time on their installation calls by stealing a known-good fiber line from a neighbor rather than spending the time to activate a new fiber line back at the central office. He said it's the follow-up repair crews that then reconnect the neighboring house that the installation tech hijacked. The two week wait for repair was all the more annoying because of having to talk to Verizon's automated, then off-shored support assistants who are advising me to re-install Windows (when I'm running Linux), while the Optical Network Termination box is flashing the "no link present" LED.

Other than paying twice as much a month for worse service, I don't see this merger benefiting me.

[M.V. Lipvig]

Re: Comparing my Frontier and Verizon service

You were speaking to Filipinos, as Verizon outsourced to Cebu in the Phillipines. And yes, they were reading from a script.