Frontier Communications Will Seek Bankruptcy

Frontier Communications, a provider of telecoms services in 29 US states and one of the top 40 telcos in the world by revenue, has told creditors that it will seek bankruptcy protection in March of this year, reports Bloomberg. The date for bankruptcy is driven by a 15th March payment of USD356mn to service the company’s debts. Frontier has debts of USD17.5bn in total.

The telco faces severe difficulties as its customers are increasingly disconnecting land lines that they no longer need. Frontier has also been criticized for underinvesting in its network and for providing poor customer service.

One merit of bankruptcy is that Frontier will be able to continue to deliver its services to existing customers without interruption. However, it is not obvious how to improve the fundamental dynamics of this business in the long run. Communications profits are being hogged by businesses that run over the top of networks, whilst operators like Frontier find it increasingly hard to justify fresh capital expenditure.

Winter is coming for telcos, and only the most successful and agile operators will survive. It was recently forecast that there will be a 45 percent fall in mobile voice revenues by 2024, and Frontier’s imminent restructuring is a reminder that ISPs and fixed line operators also face a severe downturn.

As budgets get slashed, staff will have to show how they add value, or seek another job. The most agile risk managers should grab the opportunity to demonstrate their worth. Anyone still waiting for a manual on how to do their job may find themselves out of work before it is published.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.