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The above statistic highlights Frontier Communications’ ARPU by Market (Average revenue per user) starting from Q1 2016.
Frontier Communications primarily operates the business in two markets: CTF (California, Texas, and Florida) Market and Legacy Markets.
ARPU basically shows how much revenue the company is generating per user, which shows the company’s operational performance. It helps the investors to know how well the company is utilizing its resources, which can be done by measuring the marginal profit and unit cost
Frontier communications started dealing in CTF markets after an acquisition of the Wireline business of Verizon in California, Texas, and Florida in April 2016.
In the year of acquisition, the company reported a revenue of $1.128 billion for its CTF market. A slight decline was seen in the number of customers to 5.4 million when compared to previous quarters, which leads to a fall in ARPU in Q4 FY 2016. In Q4 FY 2017, the company saw a good improvement in ARPU of $107.35 for the CTF market in the whole year, as the subscriber count was steadily increasing and saw a customer churn of around 2.22%, while the company marked a total revenue of $2.217 billion. CTF market is continuously narrowing its losses QoQ and reducing the churning rate after past huge losses, seeing signs of growth.
The statistic shows the ARPU of the Legacy market, which seems quite linear before the integration with the CTF market.
In Q4 FY 2016, the legacy market saw a reduction in revenue to 1.281 million when compared with past quarters of 2016 after the CTF deal. In Q4 FY 2017, though, the CTF market improved, but the legacy market juggled with a lack of broadband subscribers. The market saw customer churn of 1.83%, which was good compared to past quarters, and ARPU, in respect of the same, is $65.11, which is highest in the last seven quarters.
The company adopted the new ASC 606 for revenue recognition standard from Q1 FY 2018. Though the total revenue dropped down to $2.2 billion, but customer churn improved to 1.94%, which lead to the improved ARPU from 81.61 in Q4 2017 to 86.21 in Q1 2018.
The statistic also shows a comparison; if the company uses both revenue standards, then there will be even a difference between ARPU by both methods for the year 2018.
Q3 FY 2019 saw the sequential decline in revenue, compared with the last two quarters, of $1.997 billion with a subtle increase in consumer churn to 2.24% because of which ARPU also dropped to $88.68
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