Local Calling Plans Blog » Frontier Communications

Verizon Sells Landline Customers to Frontier

Local Agent — Thu, 22 Jul 2010 22:15:29 +0000

On July 1, 2010, Verizon customers in 14 states, became customers of Frontier Communications. Frontier bought the customers and their landline phone service accounts from Verizon for around 5.3 billion dollars. I have absolutly no idea why someone would want to buy landline customers, when everyone and their dog is switching to either voice over IP phone service, cell phone service, or a combination of the two.

Qwest was complaining a couple of months ago, that they were losing like 3 percent of their landline customers every month in New Mexico, and the trend was the same in their other 13 states. with that kind of customer loss, I don’t understand why a company would chose to buy landline customers. (OK, there is one reason, and that is because the US government, through the FCC’s PIC Fee program, is still paying rural phone companies to provide phone service . And the money isn’t a paltry sum. Last year there was one place in Washington state where the Feds paid a company like $600,000 to provide service to less than 30 houses.)

If any of you have any thoughts on this, drop a comment with links and lets see if we can figure this out.

Google Voice is Now Live

Local Agent — Thu, 24 Jun 2010 23:22:25 +0000

If you’ve been waiting in the wings for Google Voice to go live, because you weren’t cool enough to get an invite to their beta testing, fret-no-more, because Google Voice is now available to everyone. Yesterday, Google Voice’s Blog announced that anyone and everyone could now join Google Voice without having to have an invitation.

As an interesting side note, Frontier Telecom filed a lawsuit against Google for violating their patents. According to Frontier, Google Voice is using their technology without paying for it. Keep an eye open for updates to these and other stories on Calling-Plans.com.

New Telecom Math

Local Agent — Thu, 03 Dec 2009 20:12:03 +0000

I always wonder how come telephone companies can’t seem to stay in business. After reading an article in the Seattle PI about the pending sale of 4.8 million users and their phone service from Verizon to Frontier Communications for $8.6 billion, I now know why. At that price, Frontier is paying $1,791.67 per user line. While it’s a deal of some kind, I don’t see how you can consider it a good deal.

Sure, I’m not a high paid telecom CEO or CFO, but from what I’ve seen happening to the wireline telecom industry over the last few years, you’d have to give me the customers before I’d take them. Here are a few random reasons why I wouldn’t touch the deal with a ten foot pole:

Verizon is losing money on these customers now!
People are canceling their local wireline phone service at a rate of around 10% per year or higher.
Qwest is selling a basic local phone service account for $13.50 per month, with a full blown unlimited local and long distance calling plan for less than $50.00 per month. The problem with that, is that Frontier would have to make $50 per month in profit, off of each of their customers, for 3 years, just to break even, and that’s not going to happen.
VoIP and cell phones are set to completely replace wireline service over the next 10-20 years, so why would you pay for these customers, when you know statistically that they’re going to jump ship in the near future anyway?

There’s a whole bunch of other reasons, but the main point is that this “New Telecom Math” just isn’t going to do anything but put Frontier out of business.