Frontier Communications inked a high-profile fiber-to-the-tower (FTTT) deal with AT&T in February, but it’s not the only wireless carrier buying up Frontier’s fiber wares. Vishal Dixit, Frontier’s CSO, told Fierce that it now has active deals in place with all four major U.S. wireless providers.
Dixit said this achievement is the result of Frontier’s efforts over the past six to nine months to reinvigorate its FTTT business. When he first arrived in the first half of 2022, Dixit said maybe one carrier was actively buying new circuits while the rest were just managing legacy contracts.
While its ongoing residential build is more often discussed by executives and analysts alike, Dixit said the FTTT play is an important part of its strategy. Building up this business, he explained, will help Frontier lock in a “base load” of long-term revenue given tower contracts can carry terms of five years or more.
“It’s definitely profitable,” Dixit said of the tower business, though he declined to say how much Frontier can make off each tower. “I would say the way we’re running our towers business, it’s got amongst the highest IRRs of the components that make up our business. If developed correctly and managed correctly, I think towers are a very, very lucrative business to be in.” IRR is an acronym that refers to the rate of return a company expects on an investment.
Dixit declined to mention its customers by name beyond AT&T. But the big four are generally understood to include AT&T, Dish Network, T-Mobile and Verizon.
Though it’s already secured the major players as customers, Dixit said Frontier has plenty of room to grow the business by growing its share of tower spending as wireless carriers expand and upgrade their networks.
“We still have a significant share of wallet gain to play,” he said. “We have all four buying from us actively. But as they deploy and upgrade their masts from say 4G only to 4G expanded or 5G masts, they’re upgrading their backhaul as well. And we need to ensure that when it's on footprint, we win that business.”
Frontier doesn’t break out revenue from its FTTT business. But for the full year 2022, Business and Wholesale sales made up $2.6 billion – or roughly 45% – of the company’s $5.7 billion in revenue. The remainder came from its residential business.
In terms of competition, Frontier is up against the Crown Castles of the world as well as cable incumbents which have also historically provided backhaul services. To win sales, it is touting fiber’s immediate speeds as well as the relatively low cost path to upgrade fiber when even more speed and capacity is needed.
Interestingly, it is also talking up its ability to host edge infrastructure in its central offices. As latency becomes more important, this offering will become key, Dixit said.
AT&T became the first tenant to lease space in Frontier’s central offices in the deal the pair signed in February. But Dixit said edge and virtualized RAN deployments are something all four major providers are looking about, though they’re “at different points” in thinking about and deploying these.