Summary
1. Verizon Communication stockholders will own about 68% of Frontier Communications as a result of the recent transaction. 2. This result will put the RBOC in more direct contact with the cutover process. 3. That should help avoid some of the issues that occurred at FairPoint Communications.
Analysis
Verizon will have its cake and eat it too. It will rid itself of several million rural lines that it will not have to run anymore. At the same time, it will be able to be in more control over the transition at Frontier.
For a long while, we have said that Verizon’s focus will be on the I-95 corridor between Boston and Richmond to concentrate on Fortune 2000 customers. This deal gets it that much closer to its goal.
Finally, Verizon finds a way to unload West Virginia. People may tend to forget that it is an RBOC territory. Given the strained relationship over the decades between the Bell companies and the state, this transaction should tend to be welcomed by all parties including the state government regulators.
