CEO Nick Jeffery of Frontier said at a recent investor conference that the company believes it will be out of the copper business within five years. The company is facing the same dilemma as the other big copper owners like AT&T, Lumen, Verizon, and Windstream.
The company has an interesting path ahead to get rid of copper. At the end of the first quarter of this year, Frontier still had 9.9 million copper passings compared to 5.5 million fiber passings. But that oddly doesn’t translate into a greater number of copper customers, with 1.6 million fiber customers compared to just under 1 million copper customers.
This demonstrates the extent to which Frontier has lost DSL customers over the last decade. For much of the last decade, Frontier was the biggest percentage loser of broadband customers almost every year and quarter. At the end of 2017, the company had over 3.9 million broadband customers compared to 2.6 million now. Frontier shed some customers in the asset sale in the Northwest to Ziply, but most of the customer losses are from DSL customers fleeing to some other technology.
The company announced a goal last year to reach 10 million fiber passings by the end of 2025, so it will continue to overbuild copper areas with fiber. That should cover about half of the remaining copper passings. When Jeffery talks about getting out of the copper business, he’s talking about eventually walking away from the remaining 4 – 5 million copper passings.
But that may not turn out to be as drastic as that sounds. Many of Frontier’s copper passings will be overbuilt with fiber or some other technology as a result of the BEAD and other federal and state grant programs. Frontier will likely be participating in many of these grants to reach it’s goal of 10 million total fiber passings.
The other technology that has to be putting a big dent in DSL is FWA wireless from cellular companies. The pricing is similar to DSL pricing, but the speeds are faster. The cellular companies are marketing to the same demographic that has stayed with DSL even where cable broadband is available – households for whom price is more important than broadband speed. Verizon and T-Mobile have sprung from nowhere to gain 4.1 million FWA customers nationwide over the last year or so – and a lot of those customers must be switching from DSL.
My guess is that Frontier won’t have to cut many DSL customers dead in five years. Between their own fiber expansion, the many grant programs, and FWA cellular wireless, it seems likely that most of Frontier’s remaining DSL customers will be off copper by then. But there will inevitably be some unlucky remaining customers who will get the notice that their copper will be going dead with no offered replacement. My best guess is that Frontier’s exit from copper might be relatively easier than if the company tried to kill copper today, as is being done by AT&T and Verizon. Those two telcos are taking a lot of grief when they discontinue active copper customers. But in five years it’s likely that very few people will even be interested in the remaining Frontier copper. My guess is that market forces will get the company out of the copper business without too much pain.