Frontier Communications 2013 Annual Report Download - page 5

Lead with Broadband. We are concentrating on broadband as the core growth component of our service
offering, either bundled with our voice and/or video services, or on a standalone basis. During 2013, we added
approximately 112,250 net broadband subscribers, which exceeded the total net additions for the last three
years combined, bringing our total number of broadband subscribers to 1,866,700 as of December 31, 2013.
The increase in broadband subscribers contributed to our improved revenue performance.
We continue to spend capital for the expansion and improvement of broadband availability and speed in
our markets and view this expansion as an opportunity to attract and retain a greater number of customers and
increase average revenue per residential and business customer. These capital expenditures include enhancing
the existing outside plant by expanding fiber-based infrastructure through more of our network, enhancing
transport and expanding the capability of our middle-mile and data backbone.
As of December 31, 2013, approximately 90% of the households throughout our territories had access to
our wireline broadband products with speeds of at least 1 Mbps. See “Network Architecture and Technology”
for a table that summarizes our broadband availability to the households throughout the Company’s territories.
In addition, we have committed to federal and state regulatory authorities to expand broadband availability in
certain areas and for expansion of broadband in unserved and underserved areas. See “—Regulatory
Environment—Regulation of our business.”
Drive Revenue Performance. We tailor our services to the needs of our residential and business customers
in the markets we serve and continually evaluate the introduction of new and complimentary products and
services. We are increasing broadband market share through innovative and simplified product packages and
promotions, and we expect to improve subscription rates for broadband services. We provide direct broadcast
satellite services from DISH in all of our markets and fiber optic-based video services in parts of three states.
We have implemented several growth initiatives, including new products and services, such as wireless
broadband, satellite broadband, satellite video and “Frontier Secure” computer security and premium technical
support. We will continue to focus on growing those products and services, and review opportunities to offer
new ones. Our marketing strategy includes the sale of voice, data and video services as standalone offerings
and bundled packages and the use of promotions and incentives to drive market share through a variety of
channels. We believe these marketing strategies yield increased revenue per customer, strong customer
relationships and improved customer retention.
Keep our Customers. Our strategy includes engaging our markets at the local level to ensure that we have
a customer-driven sales and service focus that differentiates us from our competitors. Our markets are operated
by local managers responsible for the customer experience, as well as the financial results in these markets. We
invest in infrastructure improvements and enhancements each year, recognizing that the economic livelihood of
the communities we serve will affect opportunities to grow the business. We therefore have a vested interest in
the economic development of the communities we serve. We are involved in these communities to create a
competitive advantage through long-term customer loyalty. We are committed to providing best-in-class service
throughout our markets and, by doing so, we expect to maximize retention of current customers and gain new
customers. We continue to invest to provide an optimal customer experience to include enhancing our customer
service operations, efficiently provide service to new customers, and timely service resolutions for existing
customers.
Realize Cost Savings. We continue to engage in cost reduction initiatives in order to maintain and improve
our profit margins. During 2013, our cost reduction initiatives resulted in savings of $92.6 million as compared
to the prior year. We focus on simplifying our processes, eliminating redundancies and further reducing our
cost structure while improving our customer service capabilities.
Evaluate Strategic Initiatives. Selectively, we evaluate and may pursue strategic acquisitions that would
enhance shareholder value. On December 17, 2013, the Company announced that it entered into an agreement
to acquire the wireline properties of AT&T in Connecticut for a purchase price of $2.0 billion in cash. Upon
completion of the AT&T Transaction, Frontier will operate AT&T’s wireline business and fiber optic network
that provides services to residential, commercial and wholesale customers in Connecticut. The Company will
also acquire AT&T’s U-verse video and satellite TV customers in Connecticut. We expect the AT&T
Transaction to close in the second half of 2014.
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FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES