According to a story by Stop The Cap, Frontier Communications has warned investors it may be forced to declare bankruptcy reorganization to protect its assets from creditors that are growing impatient with the phone company. The company reportedly has sustained years of customer losses and a debt of $17.5 billion.
Over 71,000 Frontier customers disconnected service in the third quarter of 2019 alone, the biggest percentage of customer losses of any major residential telecom company in the United States.
Analysts suggest Frontier is considering a Chapter 11 bankruptcy filing as early as the first quarter of 2020 as part of a sweeping reorganization of the company that will also include replacing its top management.
Bloomberg News reports corporate advisers have already begun looking for a replacement of CEO Dan McCarthy, a long term Frontier executive that began a career at Rochester Telephone Corporation before it was acquired by Frontier. McCarthy replaced former Frontier CEO Maggie Wilderotter in 2015. Since Wilderotter’s departure, Frontier’s share price has spiraled downwards and customers are leaving in droves.
Frontier executives have repeatedly blamed the ongoing disconnection of traditional landline service for its declining results, but other phone companies have curtailed losses by upgrading their networks to attract new broadband customers. Frontier has only grudgingly invested in network upgrades over the last decade, particularly in its legacy copper service areas.
Frontier’s reluctance to invest adequately in its network has been noticed by many of its customers. So have the company’s ongoing billing and service problems. Frontier has been under investigation over its service performance in several states and has left some customers out of service for weeks.
A possible bankruptcy filing would allow the company to renegotiate its debts and labor agreements. Layoffs and restructuring cost cutting would likely follow. Frontier recently sold off its properties in the Pacific Northwest in an effort to raise cash to reduce its debts. Further asset sales could be forthcoming.
Frontier Communications has offices in the listening area including in Crossville on Sparta Highway.