Frontier Communications 2010 Annual Report Download - page 44

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REVENUE
($ in thousands)
As
Reported
Acquired
Business
Frontier
Legacy
$ Increase
(Decrease)
% Increase
(Decrease) Amount
$ Increase
(Decrease)
% Increase
(Decrease) Amount
2010 2009 2008
Local and long distance services. . . . . $1,797,382 $ 916,238 $ 881,144 $(66,018) (7%) $ 947,162 $ (83,790) (8%) $1,030,952
Data and internet services . . . . . . . . . . . 1,235,596 567,997 667,599 28,784 5% 638,815 33,200 5% 605,615
Switched access and subsidy. . . . . . . . . 497,775 169,904 327,871 (31,763) (9%) 359,634 (45,079) (11%) 404,713
Directory services . . . . . . . . . . . . . . . . . . . 102,786 9,319 93,467 (13,629) (13%) 107,096 (6,251) (6%) 113,347
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164,136 84,612 79,524 14,337 22% 65,187 (17,204) (21%) 82,391
$3,797,675 $1,748,070 $2,049,605 $(68,289) (3%) $2,117,894 $(119,124) (5%) $2,237,018
Local and Long Distance Services
Local and long distance services revenue for 2010 increased $850.2 million, or 90%, to $1,797.4 million,
as compared with 2009. Local and long distance services revenue for 2010 increased $916.2 million as a result
of the Acquired Business. Local and long distance services revenue for our Frontier legacy operations
decreased $66.0 million, or 7%, as compared with 2009.
Local and enhanced services revenue for our Frontier legacy operations declined $70.2 million in 2010,
primarily due to the continued loss of access lines and, to a lesser extent, decreases in private line services and
feature packages.
Long distance services revenue for our Frontier legacy operations for 2010 increased $4.2 million as
compared with 2009, primarily due to an increase in the number of long distance customers using our bundled
service offerings partially offset by lower minutes of use and a lower average revenue per minute of use. We
have actively marketed a package of unlimited long distance minutes with our digital phone and state unlimited
bundled service offerings. These offerings have resulted in an increase in long distance customers and an
increase in the minutes used by these customers. This has lowered our overall average rate per minute billed.
While these package offerings have grown our long distance customer base, those customers paying on a per
minute of use basis have reduced their calling volumes.
Local and long distance services revenue for 2009 decreased $83.8 million, or 8%, to $947.2 million, as
compared with 2008. Local and enhanced services revenue for 2009 decreased $67.0 million, or 8%, to $781.4
million as compared with 2008, primarily due to the continued loss of access lines that accounted for $41.9
million of the decline and a reduction in all other related services revenue of $25.1 million. Enhanced services
revenue in 2009 decreased $14.7 million, as compared with 2008, primarily due to a decline in access lines and
a shift in customers purchasing our unlimited voice communications packages with features included in the
bundle instead of purchasing individual features.
Long distance services revenue for 2009 decreased $16.8 million, or 9%, to $165.8 million as compared
with 2008, primarily due to a 3% reduction in the overall minutes of use and a reduction in the average revenue
per minute of use.
Data and Internet Services
Data and internet services revenue for 2010 increased $596.8 million, or 93%, to $1,235.6 million, as
compared with 2009. Data and internet services revenue increased $568.0 million as a result of the Acquired
Business and increased $28.8 million, or 5%, for our Frontier legacy operations, as compared with 2009,
primarily due to the overall growth in the number of HSI subscribers and high-capacity Internet and ethernet
circuits purchased by customers. Data services revenue for our Frontier legacy operations for 2010 increased
$15.8 million to $373.0 million, as compared with 2009. As of December 31, 2010, the number of the
Company’s HSI subscribers for our Frontier legacy operations increased by approximately 16,200, or 3%, since
December 31, 2009. Data and internet services also includes revenue from data transmission services to other
carriers and high-volume commercial customers with dedicated high-capacity Internet and ethernet circuits.
43
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES