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Frontier Communications Corporation Message Board

  • sage2123 sage2123 May 5, 2011 2:42 PM Flag

    Conference Call Take Aways

    Just finished listening to the call. Liked most of what I heard. To address some previous posts....access line losses were slightly higher due to non-payment clean ups left over from the VZ days. They are now off the books, and we can move froward.

    One thing that struck me in particular was just how badly VZ served the communities they were in. VZ had only 20% broadband penetration rates, compared to FTR's 40%. This has huge potential, as well as business account adds. FTR is commiitted to building out access for additional 1 million households. They are currently in the mid 300's. It takes 3 months (90 days) from the build to see appreciable take rates. In other words, you ain't seen anything yet. As capex costs come down and bundeled services grow, you will see a slingshot effect.

    The next four states are being converted to FTR systems in 2Q, and the benefits from that will begin to flow.

    Now that FTR has the numbers going in the right direction, the pps should stabilize and move north.

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    • In April, 2011 Google selected KC, Kansas as their first test market. For this market Google says they will lay fiber optic and provide the service. They expect to deliver the ultra high-speed internet to KC customers in the first quarter of 2012.
      Beyond that is a little unclear. What the company said when first announcing their project is that they will operate an open access network giving users "the choice of multiple service providers". How these providers will be determined is uncertain at this point. Perhaps by what the providers are willing to pay to have access to provide the service? By a royalty or licensing fee with those who want it? By decision of Google? I don't know. I lean to some type of licensing agreement with providers who want to provide the service and are willing to pay the fee, as Google has stated they want users to have their "choice of multiple service providers". Google also wants the high-speed service to be affordable to users, which indicates it will not be a "highest bidder" deal. Licensing agreements would mean big bucks for Google, as they would just sit back and collect fees from multiple service providers who will find it necessary to offer the service in order to compete, while the carriers absorb all the maintenance costs, etc. That is the beauty of licensing agreements, just collect the checks for your technology, pure gold.
      I would imagine that Frontier's FIOS lines would be a logical candidate for Google's super-speed technology if it comes to fruition, which I believe it will. Never underestimate Google.
      Google is also communicating with the FCC regarding having their ultra high-speed technology part of the government's National Broadband Plan to make broadband available to as many Americans as possible as reasonable as possible. I can't imagine how the FCC could say No to Google's request.

      Hope this is helpful to some extent.

    • WISE GUY (aka SAGE):
      I'm still laughing at your ludicrous "look at the 50 year returns" of FTR that you appear to be pleased with!

      First, in your many years of holding on to your "widows and orphans stock", one thing you clearly have not learned is that "the most successful high companies" do not pay a dividend because they do not have to! The PPS of these companies soar by multiple leaps and bounds on the merits of the company, some selling for $300-$600 per share without having to pay dividends. Dividends are paid by companies to stabilize their PPS because they have no true growth, pay dividends to "widows and orphans" in order to keep the PPS from tanking. FTR is a classic "widows and orphans" stock.

      Now for the laughs regarding the "returns" you are so happy with over many years.

      Since 1990, over 20 years, the PPS of FTR, has gone from about $16 to its present PPS of about $8.50, adjusted for splits. At no time since 1990 has it ever hit $17. It is a good solid $8-$9 stock, thanks to the dividends it finds necessary to pay to maintain even this PPS. Your "return" on the PPS of FTR since 1990 is a whopping NEGATIVE 50%, adjusted for splits! And you are pleased with this??

      The stock splits you mention are hysterical! The most recent split by FTR was in August, 1998, nearly 13 years ago! More ludicrous is the split ratio: 10075/10000, a whopping .0075% return! In 1997 Frontier made a "generous" stock split of 101/100, a lucrative 1% return. The last legitimate stock split was in 1993, 18 years ago, a 2/1 split.

      Have you become wealthy holding this jewel for some 40 or 50 years? A 6% annual return on money, such as in a safe CD or treasury bill, would double the principal every 12 years. Has your FTR return doubled every 12 years? I doubt you are "SAGE" enough to realize this, but you have actually lost considerable buying power with your investment in FTR that you are so pleased with.
      What is the difference in consumer prices since just 1990 and the present in such things as houses (even in this trashed RE market), vehicles, gas, food, etc., etc. Are you still pleased with your returns on FRT?

      While you have held FTR for some 40 or 50 years for no true gain, many truly "sage" investors have made themselves millionaires with numerous high flying high tech stocks that pay no dividends.

      Are you a charter member of the "Widows and Orphans Club"?

      End of debate.
      Good-bye for good.

    • Please tell us how this ultra high speed internet service will be distributed to the end user.

    • Ammunition....blanks?

      It's rather comical how you trot out three of the most successful tech companies at present....none of which pay a dividend. So I rather doubt you had enough acumen to buy into these at the right time. You chase dividends....right?

      All I need to look at is the 50-year returns that FTR has paid out in the way of dividends and splits.

      Many companies have gone boom and bust over the last half century. FTR is still here and still paying out the highest yield in the S&P 500.

    • SAGE:
      You conveniently omitted that this case was stayed by a judge in April, 2011.
      Anybody can file a lawsuit against anybody whenever they desire for whatever reason they desire. Filing a lawsuit means nothing. Do you have any idea how many times Google is sued? Constantly being sued is the price a company pays for being number one, the price of success. Nobody sues a loser.
      Frontier can't compete with Google, can only sue. What will FTR do when Google rolls out its internet broadband that is 100 times faster than FIOS, which will become a dinosaur?

      You need to come up with stronger ammunition - you're shooting blanks.

    • Yes....creating, improving, and stealing. This is also known as patent infringement.

      http://www.businessweek.com/news/2010-06-22/google-sued-by-frontier-communications-over-patent.html

    • Yes....creating, improving, and stealing. This is also known as patent infringement.

      http://www.businessweek.com/news/2010-06-22/google-sued-by-frontier-communications-over-patent.html

    • Yes. Land lines are dinosaurs, but I prefer using my land line over my cell phone given the choice. Maybe it's the better quality sound or the more comfortable handpiece or the fact that I can answer it anywhere in the home.

      In any event, Verizon, from my perspective, was only interested in milking every last dime that it could from the former GTE properties and did those areas no favors at all. No attempt to increase the base by adding high speed internet in most areas. If it was there they would sell it, but they wouldn't spend a dime to upgrade any facilities to compete and expand their revenue base. The best thing that they did was sell out. I don't know if Frontier can recover what has been lost, but personally, I detest cable and it's numerous glitches and frequent intermitent outages. If Frontier can offer a quality internet connection, I think they still can hold a lot of the embedded based and that translates into a very healty cash flow.

      Best of luck to them and good riddence to Verizon wireline.

    • i am holding ftr. my land line is at&t. i also have magic jack. i dumped my vz cell phone. i am happy.every phone co have people that hate them. we still buy and hold for the div. i am sorry oregon is having problems.

    • Sarge:
      I don't know what cave you have been living in, perhaps inside Bin Laden's compound, but I live in Oregon where the Frontier buy-out of VZ has been a disaster.

      I used to have VZ for phone, FIOS, and cable tv(triple package), was totally satisfied with all. In Jan., 2011, about a year after FTR acquired VZ, they announced a 45% rate increase in cable tv rates, made it clear they had no desire to continue with cable tv. Shortly thereafter they tried to get out of their cable tv agreement with the local regulators, so far have been unsuccessful.
      FTR offered the existing cable customers Direct TV, which they partially own, at no increase in rates, which we went with. Billing has been 45% higher than with VZ, not the same as stated, and their customer service is non-responsive, a total farce.

      I don't know what their plans are for FIOS, which out here is limited to areas outside of Portland. VZ and now FTR have no licensing agreements to operate with FIOS inside Portland, and never will now that they have revealed their shady hand.

      Critics predicted that FTR bit off more than they could chew with the VZ purchase, and they were correct. FTR is a relatively small NE provider, not one of the major national players. They now have huge debt from the foolish purchase, and are losing customers out West.

      You can tout all the figures you wish, but their results are a disaster in their new Western states, limited to rual areas for FIOS, trying to get out of cable tv entirely. Everybody knows there is no money to be made in wired phone service, precisely why VZ dumped on FTR in order to concentrate on the lucrative cell phone biz. The real question is why did FTR spend billions to buy a pig-in-a-poke? Poor management. The VZ purchase may bury FTR.

      • 3 Replies to dr.mal_practess
      • Why are you beating up FTR? Your problem seems to be with the people that approved the deal in your state. Do they still have a job, because it seems as if they had the wool pulled over their eyes.
        I would say that FTR put out their side and it was up to the people that approved to find out if they where telling the truth. You people did not believe those that where saying the deal was bad for you, all of you just believed that it was better to go with FTR than VZ. You believed FTR's hype.
        I don't see why you people are not finding out why Fios does not have your problems in the other FTR Fios markets. May I suggest that you check on how many of the commission people or their relatives have Frontier jobs today.

      • You really need to do some homework.

        Most, if not all, of your points are incorrect. FTR approached VZ about their lands, VZ did not "dump them" on FTR as you suggest. The deal happened on 7/1/10, so it has not been a year yet as you state. FTR was already a major national player, doing business in 20-some states prior to VZ purchase, not the small NE player you suggest. The dividend cut was announced well in advance of the purchase. This was done to allow FTR additional cash to invest in upgrading the systems VZ had neglected for so many years. The most recent quarterly results showed gains in several areas, which resulted in a pps increase. The other two major national players, which you most likely don't even know about....CTL and WIN....reported soft quarters, and their share prices decreased.

        FTR had no intention of continuing FIOS, as the 140,000 subscribers they acquired from VZ is too small of a base to make it cost effective for them to operate. This is why they are offering DISH to those customers.

      • P.S.
        Notice that the quarterly dividend went down from .25 to .188 shortly after the VZ purchase.
        What does that tell you?

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