AT&T inked a multi-year fiber connectivity deal with Frontier Communications, aiming to improve its ability to meet the needs of large enterprise customers with locations outside its existing footprint.
Announcing the deal, AT&T highlighted Frontier’s recently unveiled plan to expand its fiber network to a total of 4 million locations passed by the end of 2021 and 10 million by 2025. While 9 million business locations are already within 1,000 feet of AT&T’s fiber, it noted the new agreement will allow it to serve enterprise customers within Frontier’s 25-state footprint in “markets where it does not own a fiber network or currently plan to build one.”
An AT&T representative told Fierce the deal also includes “modifications of existing AT&T/Frontier wholesale agreements that improve the ability of Frontier to expand its network through AT&T Ethernet and Fiber connections.”
Scott Mair, AT&T’s president of network engineering and operations, said in a statement “with Frontier building out its own fiber network where we are not building, we’ll be able to work together to provide large business customers with the high-speed, low-latency data connectivity they need to grow and thrive.”
RELATED: Frontier boosts fiber target to 10M locations, eyes 10-gig service
Additionally, AT&T said the deal with Frontier will aid its efforts to deploy 5G. Specifically, it said it plans to use Frontier’s Ethernet network to improve connectivity between cell towers and the core network. The AT&T representative told Fierce “We will be able get 5G faster and sooner to our customers in many areas where we will use Frontier network.”
Analysts at New Street Research noted Frontier management recently mentioned the expected repricing of a wholesale customer (without naming AT&T) and tipped the deal to be a boon for its wholesale business over the longer term. Though Frontier’s wholesale revenue is expected to fall year-on-year through the middle of 2022 due to the repricing move, the increased volume associated with the deal should ultimately “help return wholesale revenues to growth in 2H22,” they said.
“While the impact of this deal is tough to quantify, it should help engender confidence in return to growth for wholesale revenues” and, by extension, “a return to consolidated EBITDA growth by the end of next year,” New Street’s analysts concluded.