Struggling Frontier Communications Declares Bankruptcy To Reduce Debt By More Than $10B

The embattled carrier also says it will sell its wireline operations in four states to free up $1.4 billion by the end of the month.

Ailing telecom giant Frontier Communications has officially filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York.

The embattled carrier said the move will reduce its debt by more than $10 billion and provide "significant financial flexibility" to support continued investment in its long-term growth plans. Frontier will also sell off its operations in four states on the West Coast.

Frontier, which has struggled with its balance sheet for the past four years, in January informed creditors of its plans to file for bankruptcy. Frontier at the time was aiming to file in March. The company has blamed "cord-cutting behaviors" for its weak earnings in recent years.

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Norwalk, Conn.-based Frontier said it will sell its wireline services in Washington, Oregon, Idaho, and Montana to Northwest Fiber for $1.4 billion by April 30. The carrier will keep offering services in another 25 states, which includes California and New York. Frontier says that its bankruptcy filing will not affect or interrupt services it provides to its current customers.

Together with its subsidiaries, Frontier said in a statement that it has entered into a Restructuring Support Agreement with bondholders representing more than 75 percent of Frontier’s approximately $11 billion in outstanding unsecured bonds. The carrier said it will have enough money for "operational and restructuring needs."

Frontier Business, the company's enterprise, small business and indirect sales segment, did not respond to CRN's request for comment regarding how the bankruptcy filing will impact the channel prior to publication.

The carrier in January said in a letter to the Federal Communications Commission (FCC) that it “may not have met” its required deployment milestones in thirteen states as a part of the FCC's Connect America initiative to bring broadband to more areas across the country, including remote and rural locations. Frontier received nearly $284 million from the FCC for that initiative.

Frontier currently offers telecom services in 29 states. The carrier does business through the channel via its partnerships with master agents.

Frontier in 2015 acquired Verizon's wireline assets in California, Texas and Florida for $10.54 billion. The purchase also included Verizon's TV, landline phone and broadband internet business aimed at consumers and small-business customers. The first week that Verizon wireline customers in California, Florida and Texas were switched over to Frontier proved challenging, with widespread service outages across Frontier's then-new markets that lasted about a week.

Frontier announced in 2019 that it was selling its assets and operations in Washington, Oregon, Idaho and Montana for $1.35 billion in an all-cash deal with WaveDivision Capital, a private investment firm focused on the broadband industry, in partnership with Searchlight Capital Partners.