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Frontier Launches Game Service

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One of the leading communication service provider in rural areas, Frontier Communications (FTR) has launched a new game service called “all-you-can-play PC game” for its internet customers. The company has collaborated with Exent, a privately held company that provides Games on Demand globally. The no contract game service is available to subscribers for $14.99 a month.

The new launch would cater to the U.S. population that plays online games on social networking sites and other gaming websites. According to market research, this population consists of approximately 126 million U.S. subscribers, representing a potential market opportunity for the company. Frontier’s new gaming service features over 2,300 PC casual games, including Plants vs. Zombies, Family Feud and Bejeweled.

Frontier expects to generate revenues by deploying new products as well as by broadband expansion, which in turn would lead to customer retention and wins. The company offers attractive packages of value-added services to local access line customers.

Its bundled services include High-Speed Internet (:HSI), unlimited long distance calling, enhanced telephony features, and video offerings (direct broadcast satellite services from DIRECTV and the Dish Network, FiOS services in certain states and over-the-top video on myfitv.com).

In order to improve its service quality in the broadband market, the company is ramping up its broadband internet speeds to at least 3 megabits per second (Mbps) in at least 85% of households by the end of 2013. It also plans to increase the internet speed to at least 4 Mbps by the end of 2015.

Last year, Frontier expanded its broadband availability to 415,000 new households, bringing the total number to 655,000. Further, Frontier expanded its broadband availability to 40,000 new customers, bringing the total number to 1.8 million.

With regard to new products, Frontier is committed to undertaking sales of AT&T’s products over the next three years that supports broadband, voice and satellite TV services. Along with AT&T, Inc.'s (T) mobile broadband network, Frontier will offer a wide range of smartphones, tablets and applications from the former’s product line. The deal would fuel subscriber growth while retaining the old customer base. It would also boost Frontier’s competitive position against CenturyLink, Inc. (CTL), which has a similar deal with Verizon Communications (VZ).

We currently have a long-term Neutral recommendation on the stock. For the short term (1-3 months) the stock has a  Zacks #2 Rank (Buy).

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