Frontier CommunicationsCorporation FTR, primarily serving wireline telephone communication in the rural regions of the U.S., announced a credit of up to $10 in the first month for customers availing services from its select range of security products. The discount will be available on Frontier’s Computer Security, Content Anywhere, Identity Protection, Equipment Protection Plans, and Premium Technical Support services.
A Strategic Initiative
With shopping activities at their peak during the holiday season, consumers are seen to spend rather generously on smartphones, tablets and host of other technical gadgets and devices. Naturally, the demand for support and security solutions for these devices also spikes up during this time. Given this, the timing of the offer bodes well for Frontier and should help the company lure more customers for its security services.
Of late, Frontier’s security solutions division, Frontier Secure, has led solid growth at the company. The division witnessed 90% growth year over year at the end of third quarter of 2015 and its subscriptions made a significant contribution of Average Revenue per Customer (ARPC) for the company. At present, Frontier partners with DistiNow to distribute its security solutions. Moreover, Frontier is comfortably placed to create demand for its wireless and broadband services through these products by offering attractive bundles in the future. This will help further scope for higher revenues from its other services as well.
The Bottom Line
While Frontier is trying to cash in on the shopping season, it faces sturdy competition from other security providers like Symantec Corporation SYMC and AVG Technologies N.V. AVG that are reasonably popular among customers. Moreover, as competition in the telecom space is intense, larger telecom operators like Verizon Communications Inc. VZ are constantly introducing similar bundled offerings to consolidate their position in the market. Frontier may have timed its offer perfectly, but it remains to be seen whether such approaches can induce demand for its services and improve its position in the said market, going forward.
Frontier currently carries a Zacks Rank #3 (Hold).
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