Murphy – The writing seems to be on the wall.
According to multiple news reports, rural telecom provider Frontier Communications has appointed Bernard Han as president and CEO to replace Dan McCarthy, who has led the company since 2015. Frontier, which was responsible for a loss of emergency 911 communications throughout western North Carolina earlier this year, is also being investigated by South Carolina regulators, who want to know whether the company is spending money properly after a small community was forced to go without landline phone service for nearly a month.
Frontier also carries roughly $17 billion in debt, which financial experts say stems from a number of acquisitions. Additionally, the company’s landline revenue has been decreasing, and some analysts believe that if Frontier does not reach an agreement with creditors, it will have to file for Chapter 11 bankruptcy.
What does this mean for Cherokee County residents and others throughout the state who receive landline service from Frontier, which has an office at 76 Church St. downtown?
“Bankruptcy protection should alleviate some of the stress from outstanding debt,” Cherokee County Commissioner C.B. McKinnon said. “But if they were to go belly up and dissolve as a company, someone would buy it.”
Chapter 11 is a form of bankruptcy that essentially reorganizes a company’s business affairs, debts and assets. Corporations generally file Chapter 11 if they need time to restructure debts, and this version of bankruptcy gives the debtor a fresh start.
But will that be enough to spark a comeback for Frontier? The company’s executives blame the ongoing shift away from traditional landline service for declining results. Frontier’s clients have been leaving in herds, and analysts say more than 71,000 customers left the company in the third quarter of 2019 alone.
Moreover, Frontier’s share price has spiraled downward for the last four years. The company’s stock ended trading at 75 cents per share Friday.
“Wired service is a dying industry in all forms,” McKinnon said.
Regardless of what happens with Frontier after the first of the new year, local officials do not expect a drop in service as a result of bankruptcy or a sale of the company.
“I don’t think Frontier can just pull out and leave a community hanging,” Commissioner Gary “Hippie” Westmoreland said. “The emergency 911 system for western North Carolina goes through them.”
Commissioner Cal Stiles echoed those thoughts.
“Someone will pick up pieces of it, hopefully,” he said.