NORWALK -- Connecticut based Frontier Communications is staring a financial crisis straight in the face. Frontier Communications is expected to file for bankruptcy in the Spring. It’s important to note, that may simply mean a reorganization of debt to find a sustainable path forward.
Union workers are protected by their contract from layoffs until October of 2022 and customers may see no change at all. Frontier Communications is based in Norwalk and they are a company in transition.
“For the last several years we’ve seen no investment in Connecticut and no investment in jobs,” said David Weidlich. He’s a Frontier employee, and CWA Local #1298 Union President.
Frontier may file for bankruptcy and that has workers worried. “Our main concern is how does that impact our jobs and the people who live in Connecticut.”
Frontier has more than $16-billion in debt, with $365-million due to be paid back in March. Frontier Vice President of Communications and External Affairs Javier Mendoza said “Frontier’s business and operations are solid and serving our customers remains our top priority.
As we have said publicly, Frontier is evaluating its capital structure with an eye to reducing debt and interest expense so as to be able to better serve our customers. Our customers should expect no changes as we remain focused on providing quality communications services.”
Five years ago, Frontier’s stock traded at $125 a share. Now, it’s just over 50-cents.
Frontier’s troubles began in 2014 with a botched takeover of AT&T.
“We found that frontier had inferior systems,” explained Weidlich. According to Weidlich, the problem was compounded by a 2016 purchase of Verizon networks in California, Florida and Texas. “They weren’t prepared to deal with that. They had a lot of turn in their customer service and customer support and it made a lot of customers leave the business.”
He’s hopeful new CEO Bernie Han, who led a turnaround at Dish Network, can be a change agent.
“Make the customers happy, grow the business and tackle the debt problem. We’re hopeful that he can lead us through those problems,” he said.
It’s a tall task in an industry of constant change.
Media Studies Professor at Quinnipiac University, Kearston Wesner said, “In that landscape it’s difficult to survive using the same business model that they’ve been using.”
More customers are abandoning their landline telephone and cutting the cable cord in favor of streaming services.
“We’ve had issues with streaming competing with cable services for a long time. There’s been a history of cord cutting and this is the inevitable conclusion,” explained Wesner.
Although based in Connecticut, Frontier services 29 states and has been seeing its customer base and workforce shrink.