Frontier Communications saw its overall revenue grow nearly 4 percent, fueled by an uptick in new broadband customers during its third financial quarter (Q3) of the year, the company said on Tuesday.
The pure-play fiber Internet provider, which is in the process of being acquired by Verizon Communications, added 108,000 new broadband customers and saw its average revenue per user (ARPU) grow to $65.40, a sequential increase of nearly 20 percent and 1.4 percent increase on a year-over basis.
Revenue attributed to residential and enterprise service customers jumped 3.7 percent to $1.49 billion. The company’s operating income was $86 million and its net income loss was $82 million.
The bulk of Frontier’s overall revenue came from its residential service business, with income relatively flat at $789 million, the company disclosed. Broadband revenue gains of nearly 22 percent were offset by declines in Frontier’s video and voice services.
Despite opposition from some shareholders, Frontier remains bullish on its acquisition by Verizon, which will earn investors nearly $38.50 per share if it gains regulatory approval. Frontier said the outcome is in the best interest of shareholders, and has urged them to approve the acquisition at a special meeting to be held on November 13.
Some institutional shareholders say the Verizon deal undervalues Frontier’s future business prospects, particularly if the company is able to meet certain fiber build-out goals, and that the valuation of $38.50 per share isn’t enough to make them whole relative to what Frontier could earn as a standalone business once its fiber investments are fully realized.
