Frontier Communications 2010 Annual Report Download - page 7

satellite services from DirecTV and DISH, fiber optic video services in certain states and over-the-top internet
video on our www.myfitv.com website. As we strive to provide consumers with a diverse range of
communications services, we continuously evaluate the viability of other communications product alliances. In
addition, we have implemented, and will continue to implement, several growth initiatives, including launching
new products and services with a focus on areas that are growing or demonstrate meaningful demand, such as
wireline and wireless HSI, satellite video products, Internet advertising and the “Frontier Peace of Mind”
computer technical support. We will continue to focus on growing those products and services and to offer new
ones, should we determine that they would be attractive to our customers.
Ensure integration of the Acquired Business. Effective with the closing of the Transaction, the Acquired
Business (other than in West Virginia) has been operating on a common Verizon replicated information
systems platform on an independent basis, and the Acquired Business in West Virginia has been integrated on
to our existing systems. The main integration effort required for us to operate the Acquired Business (in West
Virginia) immediately following the Merger was successfully completed prior to the closing of the Merger,
freeing up our resources to implement further strategies to achieve cost savings and drive revenue
enhancements, including the information and network integration described below and the expansion of the
broadband footprint.
We continue to implement our “go to market” strategy in our new markets and to complete the
conversions of all the remaining systems into one platform. Our goal is to have the conversions completed by
the end of 2012.
Increase operating efficiencies and realize cost savings. We aim to achieve cost savings by applying our
corporate administrative functions and information technology and network systems to cover certain former
Acquired Business functions (including certain functions formerly provided by Verizon, or other third-party
service providers, to the Acquired Business). We currently anticipate that our annualized cost synergies will
reach approximately $550 million and will be fully achieved by the end of 2012, when the Acquired Business’s
network and information technology systems and processes are fully integrated with those of our legacy
business. However, there can be no assurance that this level of cost savings will actually be realized.
Growth through selective acquisitions. We continue to evaluate and may pursue select strategic
acquisitions that would enhance revenues and cash flows, although until July 2012 we are subject to certain
restrictions on the acquisition, issuance, repurchase, or change of ownership of our capital stock. We will
continue to adhere to our selective criteria in our acquisition analysis.
Services
We offer a broad portfolio of high-quality communications services for residential and business customers
in each of our markets. These include services traditionally associated with local telephone companies, as well
as other services such as long distance, Internet access, broadband-enabled services and video services. We
offer these services both a la carte and, increasingly, as bundled packages which are purposely designed to
simplify customer purchasing decisions and to provide the customer with pricing discounts. We also offer
incentives and promotions such as gifts to influence customers to purchase or retain certain services. We also
enhance customer retention by offering one-, two- and three-year price protection plans under which customers
commit to a term in exchange for predictable pricing or other incentives and promotions. We are staffed locally
with skilled technicians and supervisory personnel, which enables us to provide efficiently and reliably an array
of communications services to meet our customers’ needs. Our call center operations and field technicians are
staffed with 100% U.S.-based personnel.
Generation of Revenue
We generate revenue primarily by providing: (1) basic local and long distance voice wireline services to
residential and business customers in our service areas; (2) data and Internet services and wireless data services;
(3) network access to interexchange carriers for origination and termination of long distance voice and data
traffic; and (4) directory listing and advertising; and (5) sales of third party and owned video services.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES