Frontier Communications Parent, Inc. (FYBR): Business Model Canvas [11-2024 Updated]

In the rapidly evolving telecommunications landscape, Frontier Communications Parent, Inc. (FYBR) stands out with its innovative business model designed to deliver high-speed fiber broadband services. This blog post delves into the intricacies of FYBR's Business Model Canvas, highlighting its key components such as value propositions, customer segments, and revenue streams. Discover how Frontier is not only enhancing connectivity but also striving to close the digital divide for underserved communities. Read on to explore the strategic elements that drive Frontier's success.

Frontier Communications Parent, Inc. (FYBR) - Business Model: Key Partnerships

Collaborations with technology vendors

Frontier Communications partners with various technology vendors to enhance its service offerings and operational efficiency. Notable collaborations include:

• Partnerships with fiber network equipment providers to facilitate the expansion of its fiber optic infrastructure, contributing to a 14% increase in fiber revenue to $867 million for Q3 2024 compared to Q3 2023.
• Vendor financing agreements that allow Frontier to manage cash flow while investing in network upgrades. As of September 30, 2024, vendor financing liabilities were approximately $56 million.

Partnership Type	Vendor/Partner	Impact
Fiber Equipment	Major Fiber Network Suppliers	14% fiber revenue growth
Vendor Financing	Various Technology Vendors	$56 million in liabilities

Partnerships with content providers

Frontier has established strategic partnerships with content providers to enhance its video and streaming service offerings. These include:

• Collaborations with OTT (Over-The-Top) video providers to bundle services with broadband, which has become increasingly important as traditional video revenues decline—video service revenue dropped 20% year-over-year to $83 million in Q3 2024.
• Integrating content offerings to provide value-added services that enhance customer retention, especially in the fiber broadband segment where ARPU grew by 4% to $65.41.

Partnership Type	Partner/Provider	Impact
OTT Content	Various OTT Providers	Bundled service offerings
Video Services	Multiple Streaming Services	20% decline in traditional video revenue

Regulatory bodies for compliance

Frontier Communications actively collaborates with regulatory bodies to ensure compliance with telecommunications regulations, which is crucial for maintaining operational licenses and funding opportunities. Key aspects include:

• Engagements with the FCC (Federal Communications Commission) regarding compliance with broadband service standards and funding applications, particularly for rural broadband expansion.
• Participation in regulatory discussions that shape industry standards and practices, ensuring that Frontier remains compliant while pursuing its strategic objectives.

Regulatory Body	Focus Area	Impact
FCC	Broadband Compliance	Funding for rural expansion
State Regulatory Agencies	Service Standards	Operational Licenses

Local governments for infrastructure projects

Frontier partners with local government entities to develop infrastructure projects that enhance broadband access. These partnerships include:

• Collaboration on municipal broadband initiatives aimed at increasing fiber access in underserved areas, which is essential for Frontier’s growth strategy.
• Participation in public-private partnerships (PPPs) to share costs and resources for infrastructure development, which helps mitigate financial risks associated with large-scale projects.

Partnership Type	Local Government	Impact
Infrastructure Development	Various Municipalities	Increased fiber access
Public-Private Partnerships	Local Government Entities	Cost-sharing on projects

Frontier Communications Parent, Inc. (FYBR) - Business Model: Key Activities

Fiber network expansion and maintenance

Frontier Communications is actively focused on expanding its fiber network. As of September 30, 2024, the company reported a fiber broadband customer base of approximately 2.157 million, representing a 20% increase from 1.797 million in the previous year. This growth is supported by a strategy to add approximately 104,000 new fiber broadband customers in the third quarter of 2024 alone, compared to 75,000 in the same quarter of 2023.

The total capital expenditures for the nine months ended September 30, 2024, were approximately $1.991 billion, reflecting the company's commitment to fiber network expansion. The increased investment in fiber infrastructure is expected to enhance service delivery and customer retention, with fiber revenue increasing by 14% year-over-year to $867 million for the third quarter.

Customer service and support

Frontier has made significant investments in customer service, aiming to improve customer satisfaction and reduce churn. The consumer customer churn rate for fiber broadband was reported at 1.49% for the third quarter of 2024, a slight increase from 1.47% in the same period of 2023. However, the overall customer base grew, indicating effective retention strategies.

As of September 30, 2024, Frontier had approximately 12,950 employees, down from 13,756 in 2023. This reduction may reflect a focus on operational efficiency while enhancing service quality.

Marketing and sales strategies

Frontier's marketing efforts are increasingly focused on promoting its fiber broadband services, which have shown substantial growth. Fiber revenue accounted for $2.512 billion in the nine months ended September 30, 2024, up 12% from the previous year. The company also experienced a net gain of 279,000 consumer fiber broadband customers in the nine months ended September 30, 2024.

The total revenue from contracts with customers for the third quarter of 2024 was reported at $1.471 billion, a 4% increase compared to the previous year. The sales strategy emphasizes transitioning customers from copper to fiber services, capitalizing on the growing demand for high-speed internet.

Data management and analytics

Data management plays a critical role in Frontier's operations, particularly in understanding customer behavior and optimizing service delivery. The company reported an increase in data and internet services revenue to $1.004 billion for the third quarter of 2024, a 12% increase from $895 million in the same quarter of 2023.

Frontier's ability to utilize data analytics for operational efficiency is reflected in the reduction of cost of service expenses, which decreased by 1% to $538 million for the third quarter of 2024. The use of analytics helps in identifying trends and improving customer experience, thereby supporting revenue growth and customer retention initiatives.

Key Activity	Metric	Value (2024)	Value (2023)	Change (%)
Fiber Network Expansion	Fiber Customers	2.157 million	1.797 million	20%
Capital Expenditures	Total CapEx	$1.991 billion	$2.882 billion	-31%
Customer Service	Churn Rate (Fiber)	1.49%	1.47%	1%
Marketing Strategies	Total Revenue from Contracts	$1.471 billion	$1.421 billion	4%
Data Management	Data and Internet Services Revenue	$1.004 billion	$895 million	12%

Frontier Communications Parent, Inc. (FYBR) - Business Model: Key Resources

Fiber-optic infrastructure

Frontier Communications has extensively invested in its fiber-optic infrastructure, with a reported capital expenditure of $1,991 million for the nine months ended September 30, 2024 . As of September 30, 2024, the company’s fiber revenue reached $2,512 million, marking a 12% increase year-over-year. This infrastructure supports faster, symmetrical broadband speeds and is essential for delivering data and internet services to both consumer and business segments.

Skilled workforce of approximately 13,000 employees

As of September 30, 2024, Frontier Communications employed approximately 12,950 individuals. This skilled workforce is crucial for operational efficiency, customer service, and the implementation of the company's fiber expansion strategy. The company has experienced a reduction in workforce from 13,756 employees in the previous year, reflecting ongoing adjustments to align with business needs.

Financial resources for capital expenditures

Frontier reported liquidity of approximately $1,980 million as of September 30, 2024, comprised of $1,320 million in cash and cash equivalents, along with $660 million in available capacity on its undrawn revolving credit facility . The company's total long-term debt was recorded at $11,246 million . This financial strength enables continued investments in infrastructure and operational capabilities, crucial for supporting the company's growth initiatives.

Customer relationship management systems

Frontier utilizes advanced customer relationship management (CRM) systems to enhance customer engagement and service delivery. This system is pivotal in managing interactions with both consumer and business clients, contributing to improved customer retention rates. The company reported a consumer customer churn rate of 1.49% for the three months ended September 30, 2024, a slight increase from 1.47% in the previous year. The effective use of CRM tools supports Frontier's strategy to transition customers from copper to fiber services, enhancing overall customer satisfaction and loyalty.

Key Resource	Details	Financial Impact
Fiber-optic Infrastructure	Extensive fiber network supporting broadband services	$2,512 million fiber revenue (12% increase)
Skilled Workforce	Approximately 12,950 employees	Operational efficiency and customer service
Financial Resources	Liquidity of $1,980 million	Total long-term debt: $11,246 million
CRM Systems	Advanced systems for customer management	1.49% consumer churn rate

Frontier Communications Parent, Inc. (FYBR) - Business Model: Value Propositions

High-speed fiber broadband services

Frontier Communications focuses on providing high-speed fiber broadband services, which have shown significant growth. For the nine months ended September 30, 2024, fiber revenue reached $2,512 million, a 12% increase from $2,235 million in the same period of 2023. The total number of consumer fiber broadband customers increased to 2,157,000, representing a 20% growth compared to 1,797,000 in September 2023.

Reliable internet and voice services

Frontier offers reliable internet and voice services, which include traditional local and long-distance services, as well as Voice over Internet Protocol (VoIP). Despite a decline in voice service revenue, which decreased by 12% to $301 million for the three months ended September 30, 2024, the company continues to provide these essential services. The overall consumer ARPU (average revenue per user) for fiber broadband reached $65.40, an increase of 1% compared to the previous year.

Competitive pricing for fiber plans

Frontier's competitive pricing strategy for fiber plans is evident in the 0% increase in consumer revenues for the three months ended September 30, 2024, remaining at $789 million. The company aims to maintain affordability while transitioning customers from copper to fiber, which has resulted in a 14% increase in fiber revenue for the same period. This pricing strategy is designed to attract new customers while retaining existing ones amid increasing competition in the broadband market.

Commitment to closing the digital divide

Frontier is committed to closing the digital divide by expanding its fiber network to underserved areas. The company reported a net addition of approximately 123,000 consumer broadband customers for the nine months ended September 30, 2024, indicating a strong focus on expanding access. The overall objective is to enhance connectivity and provide high-speed internet to regions that have historically faced limitations, further solidifying Frontier's role in promoting digital equity.

Metric	Q3 2024	Q3 2023	Change (%)
Fiber Revenue ($ in millions)	867	760	14%
Copper Revenue ($ in millions)	604	661	(9)%
Total Revenue ($ in millions)	1,489	1,436	4%
Consumer Fiber Broadband Customers	2,157,000	1,797,000	20%
Consumer ARPU ($)	65.40	64.49	1%
Net Customer Additions (Fiber)	123,000	49,000	151%

Frontier Communications Parent, Inc. (FYBR) - Business Model: Customer Relationships

Customer support through multiple channels

Frontier Communications provides customer support through various channels, including phone, online chat, and social media. As of September 30, 2024, the company reported approximately 12,950 employees, with a significant portion dedicated to customer service operations. The average monthly consumer revenue per customer (ARPC) was $83.12, reflecting ongoing customer engagement and support efforts.

Personalized service offerings

Frontier has focused on personalized service offerings by enhancing its fiber broadband services. The company experienced a 20% increase in fiber broadband consumer customers, reaching approximately 2,157,000 as of September 30, 2024. This growth is attributed to tailored services that meet specific customer needs, as evidenced by the increase in average monthly consumer fiber broadband revenue per customer (ARPU) to $65.40.

Loyalty programs for existing customers

Frontier Communications has implemented loyalty programs aimed at retaining existing customers. The company reported a consumer customer churn rate of 1.80% for the three months ended September 30, 2024, indicating effective retention strategies. Furthermore, the company gained approximately 22,000 and 47,000 consumer customers for the three and nine months ended September 30, 2024, compared to losses in the same periods of the previous year.

Community engagement initiatives

Frontier engages with communities through various initiatives aimed at enhancing customer relationships. As part of its fiber expansion strategy, the company invested heavily in improving network capabilities, which has indirectly fostered community engagement. In the nine months ending September 30, 2024, Frontier's total revenue reached $4,431 million, demonstrating the financial benefits of community-focused service enhancements.

Metric	2024 (Q3)	2023 (Q3)	% Change
Consumer Customers (Fiber)	2,157,000	1,797,000	20%
Consumer Customer Churn Rate	1.80%	1.70%	6%
Average Monthly Consumer ARPC	$83.12	$83.99	-1%
Total Revenue	$4,431 million	$4,325 million	2%

Frontier Communications Parent, Inc. (FYBR) - Business Model: Channels

Direct sales through company website

Frontier Communications generates significant revenue through direct sales via its company website. For the nine months ended September 30, 2024, the total revenue was reported at $4,431 million, with fiber revenue accounting for $2,512 million, marking a 12% increase from the previous year.

Retail locations for in-person support

Frontier maintains a network of retail locations to provide in-person support and services to customers. As of September 30, 2024, the company had approximately 3,176 total customers, which includes a significant number of fiber broadband customers added through these retail outlets.

Partnerships with third-party retailers

Frontier has established partnerships with third-party retailers to expand its market reach. These partnerships are crucial for acquiring new customers, particularly in fiber broadband services. The company reported net customer additions of approximately 22,000 and 47,000 for the three and nine months ended September 30, 2024.

Digital marketing campaigns

Digital marketing campaigns play a vital role in Frontier's strategy to attract and retain customers. For the nine months ended September 30, 2024, the average monthly consumer revenue per customer (ARPC) was $83.51, reflecting an increase due to effective digital marketing efforts.

Channel	Revenue Impact ($ millions)	Customer Additions	ARPC ($)
Direct Sales via Website	2,512	47,000	83.51
Retail Locations	Data Not Specified	22,000	Data Not Specified
Partnerships with Retailers	Data Not Specified	Data Not Specified	Data Not Specified
Digital Marketing Campaigns	Data Not Specified	Data Not Specified	83.51

Frontier Communications Parent, Inc. (FYBR) - Business Model: Customer Segments

Residential consumers

As of September 30, 2024, Frontier Communications reported approximately 3.176 million total consumer customers, with an increase of 22,000 customers from the previous quarter. The fiber broadband segment gained approximately 104,000 new customers during the third quarter of 2024, reflecting a 20% year-over-year increase in fiber broadband customers, totaling 2.157 million.

The average monthly revenue per customer (ARPC) for residential consumers was $83.12 for the three months ended September 30, 2024, with a slight decrease from $83.99 in the previous year.

Small and medium businesses

For small and medium business customers, Frontier Communications reported 138,000 business and wholesale customers as of September 30, 2024, marking a 10% increase compared to the previous year. Business and wholesale revenue increased by 8% year-over-year for the three months ended September 30, 2024, totaling $682 million.

Data and Internet services for small and medium businesses generated revenue of $1.004 billion for the three months ended September 30, 2024, up from $895 million in the previous year, representing a 12% increase.

Large enterprises and wholesale customers

Frontier’s large enterprise and wholesale customer base is included in the business and wholesale category, which encompasses 96,000 wholesale customers as of September 30, 2024. This segment experienced a 20% decline in copper broadband customers.

The total revenue from business and wholesale customers for the nine months ended September 30, 2024, was $2.018 billion, up 4% from $1.944 billion in the same period of 2023.

Underserved rural communities

Frontier Communications has focused on expanding its fiber network into underserved rural communities, contributing to the overall growth in fiber broadband customers. The company aims to enhance service availability in these areas, where demand for high-speed internet remains high. As of September 30, 2024, approximately 1.2 million customers in rural areas had access to fiber broadband.

In 2024, Frontier invested approximately $1.991 billion in capital expenditures, with a significant portion directed towards expanding services in rural regions.

Customer Segment	Customer Count	Revenue (Q3 2024)	ARPC
Residential Consumers	3.176 million	$789 million	$83.12
Small and Medium Businesses	138,000	$682 million	N/A
Large Enterprises and Wholesale Customers	96,000	$2.018 billion (YTD)	N/A
Underserved Rural Communities	1.2 million	N/A	N/A

Frontier Communications Parent, Inc. (FYBR) - Business Model: Cost Structure

Network infrastructure development costs

As of September 30, 2024, Frontier Communications incurred significant costs for network infrastructure development, amounting to approximately $1,991 million in capital expenditures for the nine months ended September 30, 2024. This reflects a decrease from $2,882 million for the same period in 2023, attributed to lower levels of build prework and materials and supplies purchases.

Period	Capital Expenditures ($ millions)
2024 (9 months)	1,991
2023 (9 months)	2,882

Operational expenses for service delivery

Operational expenses for service delivery totaled $4,164 million for the nine months ended September 30, 2024, an increase of $211 million or 5% compared to the same period in 2023. Key components included:

• Cost of Service: $1,576 million (2024), down from $1,615 million (2023)
• Selling, General, and Administrative Expenses: $1,304 million (2024), up from $1,250 million (2023)
• Depreciation and Amortization: $1,196 million (2024), up from $1,040 million (2023)
• Restructuring Costs: $88 million (2024), up from $48 million (2023)

Expense Type	2024 ($ millions)	2023 ($ millions)
Cost of Service	1,576	1,615
Selling, General, and Administrative	1,304	1,250
Depreciation and Amortization	1,196	1,040
Restructuring Costs	88	48
Total Operational Expenses	4,164	3,953

Marketing and advertising expenditures

Marketing and advertising expenditures, included within Selling, General, and Administrative expenses, increased by $22 million year-over-year, reaching $427 million for the three months ended September 30, 2024. This reflects a strategic focus on enhancing brand presence and customer acquisition.

Employee salaries and benefits

As of September 30, 2024, Frontier Communications employed approximately 12,950 individuals, a decrease from 13,756 in 2023. Employee-related expenses, including salaries and benefits, are encompassed within the Selling, General, and Administrative expenses, which totaled $1,304 million for the nine months ended September 30, 2024.

Metric	2024	2023
Employees	12,950	13,756
Salaries and Benefits Expense (part of SG&A)	Included in $1,304 million	Included in $1,250 million

Frontier Communications Parent, Inc. (FYBR) - Business Model: Revenue Streams

Recurring subscription fees for broadband services

Frontier Communications generates a significant portion of its revenue through recurring subscription fees for broadband services. For the three months ended September 30, 2024, the company reported data and internet services revenue of $1,004 million, an increase of 12% compared to $895 million for the same period in 2023. For the nine months ended September 30, 2024, this revenue reached $2,934 million, marking an 11% increase from $2,637 million the previous year.

One-time installation and setup fees

Frontier also earns revenue from one-time installation and setup fees associated with new broadband service activations. For the three months ended September 30, 2024, the company included lease revenue of $13 million as part of its revenue from contracts with customers. This revenue stream is vital as it supports the initial costs incurred when establishing services for new customers.

Revenue from voice and video services

Revenue from voice and video services has been declining, reflecting changing consumer preferences. For the three months ended September 30, 2024, voice services revenue decreased 12% to $301 million from $341 million in the prior year. Video services revenue similarly fell 20% to $83 million from $104 million. This trend indicates a shift in customer focus towards internet services, particularly fiber broadband.

Government subsidies and grants for expansion initiatives

Frontier Communications also receives government subsidies and grants to support its expansion initiatives. For the three months ended September 30, 2024, subsidy revenue increased 20% to $18 million, up from $15 million in the same period in 2023. However, for the nine months ended September 30, 2024, subsidy revenue decreased to $48 million from $58 million, a 17% decline.

Revenue Stream	Q3 2024 Revenue (in millions)	Q3 2023 Revenue (in millions)	Change (%)
Data and Internet Services	$1,004	$895	12%
Voice Services	$301	$341	-12%
Video Services	$83	$104	-20%
One-time Installation Fees	$13	$14	-7%
Government Subsidies	$18	$15	20%

This table summarizes the revenue streams for Frontier Communications as of Q3 2024, highlighting growth in data services while showing declines in voice and video services.

Updated on 16 Nov 2024

Resources:

1. Frontier Communications Parent, Inc. (FYBR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Frontier Communications Parent, Inc. (FYBR)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Frontier Communications Parent, Inc. (FYBR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.