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Mergers & acquisitions

A Brave New Frontier – in an RV

Frontier Communications Corp. (NYSE: FTR) this week is conducting what it calls The Great Conversations Tour, meeting with customers in Frontier's new Central region and welcoming those from the rural properties the telco has acquired from Verizon Communications Inc. (NYSE: VZ).

The road tour will be stopping in 10 cities in Illinois, Wisconsin, and Ohio, under the sponsorship of Adtran Inc. (Nasdaq: ADTN), Frontier's access equipment vendor, to spread the good news that Frontier intends to bring more broadband to its new territory, and install local management in each town.

"On average, these properties that we purchased from Verizon had 62 percent broadband accessibility, and we will be looking to take that to 85 percent in two years," says John Lass, president of Frontier's Central Region. "In our current properties, we are averaging 92 percent broadband accessibility.

As part of the road tour, Frontier is also meeting with new employees, and promising not to lay off frontline employees as part of the merger process. Seeing that FairPoint Communications Inc. 's conquest of some other rural Verizon territories resulted in disgruntled union employees and angry customers, Frontier seems to be using this proactive approach as a way to make a smooth ownership transition.

Lass doesn't want to comment on FairPoint's experience taking over Verizon territories in the Northeast. Like FairPoint, Frontier is acquiring territory that is larger than the original company. One difference, Lass says, is that Frontier has previous experience in acquisition and merger operations.

"Frontier has a history, we have done other acquisitions in the past and some of them have been very sizeable," Lass says. "This acquisition triples the size of the company. But we have learnings from prior ones and we have a great employee base that is focused in on the customer."

For its tour, Lass, other Frontier employees and Adtran representatives as well, are traveling via RV and staging customer appreciation days with free entertainment, food and drink, as well as local Chamber of Commerce events and other activities designed to acquaint the locals with the services Frontier offers.

Chief among those offers is Internet access at 3 Mbit/s, 4 Mbit/s, and 6 Mbit/s, and MyFiTV, Frontier's OTT video offering. Frontier also is reselling DirecTV and DISH video services.

Frontier is differentiating itself in other ways. It is putting local management in place in the belief that the markets it serves need that local touch, Lass says. Most larger carriers have moved away from local management in recent years as a cost-cutting move.

And while most Internet service providers today on the telecom side are drop-shipping DSL modems to customers for self-installs, also to control costs, Frontier continues to send a technician to turn up each customer in the belief that better customer service keeps customers happier and may be cheaper in the long run, Lass says.

"We'd rather roll a truck to do an install, than roll a truck later to fix a problem," he says. "Our technicians turn the service on and make sure it is working perfectly. That makes customers a little bit happier. "

Adtran is certainly happier to see Frontier move into these new areas and deploy its access gear, including the Total Access 5000. According to Lass and Gary Bolton, Adtran's vice president of global marketing, Frontier will be tailoring its deployment strategies to each community's needs. "Some areas are first placements, Lass says. "Other areas will be augmentation. In some cases, we will move equipment around, based on what is the best fit for the area so we can make that expansion happen. What we want to do is be smart about how we build this out so it has future potential and future growth."

"Frontier has a world-class network planning organization, and they realize that each wire center is unique," Bolton says. "With a native Ethernet platform, they can do legacy service migration and transition to next-gen service."

— Carol Wilson, Chief Editor, Events, Light Reading

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