Frontier Acquisition of Verizon Could Help Dish Network

Frontier Communications today announced that it would be acquiring some Verizon assets to create the nation's largest "pure rural" communications service provider.

Under the acquisition agreement, Frontier would acquire approximately 4.8 million access lines from Verizon and the deal is valued at $8.6 billion dollars for the all stock transaction. This make Frontier the nation's fifth largest incumbent local exchange carrier (ILEC) with more than 7 million access lines, 8.6 million voice and broadband connections and 16,000 employees in 27 states. Frontier will offer broadband, new bundled services and expanded technologies to customers across its expanded geographic footprint.

Under the terms of the agreement, Verizon will establish a separate newly formed entity (SpinCo) for its local exchanges and related business assets in 14 states. SpinCo will be spun off to Verizons shareholders and simultaneously merged with and into Frontier. The transaction has been approved by the Boards of Directors of Frontier and Verizon, and is expected to be completed within approximately 12 months.

Maggie Wilderotter, Frontier Communications Chairman and Chief Executive Officer, said, This is a truly transformational transaction for Frontier. With more than 7 million access lines in 27 states, we will be the largest pure rural communications provider of voice, broadband and video services in the U.S. Frontier is committed to providing our customers with state-of-the-art technology and innovative products. We are confident that we can dramatically accelerate the penetration of broadband in these new markets during the first 18 months. We know that broadband is a catalyst for a healthy local economy and job growth.

We have a track record of successfully integrating new operations and know that a seamless transition benefits customers and employees. Frontier and Verizon have gone to great lengths to ensure that the transaction will be well-executed. We will focus on execution, as well as on improving operations, delivering new products and services and achieving synergy targets. This transaction makes us a larger and an even stronger company, with significantly greater free cash flow generation capability. This acquisition will benefit the communities we serve, increase opportunities for employees and allow us to continue to deliver world-class profit margins and revenue growth for shareholders, continued Ms. Wilderotter.

A Deal That Could Help Dish Network

The deal could actually benefit Dish Network because they currently have a partnership with Frontier and the additional lines that Frontier receives from the acquisition could lead to many more subscribers for Dish. This comes at a good time for Dish, as they announced a first quarter loss of nearly 100,000 customers. The hurting company also lost agreements with AT&T as they moved on to DirecTV in January.