Telecommunications
11:15 pm
Tue December 17, 2013

Frontier to Buy AT&T's Landline Business

Credit Ciaran Griffin/Stockbyte / Thinkstock

Stamford-based Frontier Communications announced plans to buy the landline service of AT&T in Connecticut. About 1.4 million households in Connecticut will be affected by the sale of the business, which includes Internet subscribers and U-verse video customers. 

Frontier said it will continue to offer all the current services, plus others that it offers now in New York and Pennsylvania. Chief Operating Officer Dan McCarthy said it should be a smooth transition. "We have extensive experience in billing system conversions," he told investors on a conference call. "We have consolidated seven billing systems into one over the last seven years. And we have the capacity in our systems to accommodate the Connecticut customer base."

It's less clear what the merger might mean for jobs. More than 2,000 AT&T employees are affected, and Frontier CEO Maggie Wilderotter said the company will be looking for significant cost savings as it integrates the business. "We see the opportunity to realize $200 million of cost synergies and savings over a three year window," said Wilderotter. "There is $75 million in immediate cost reductions on day one."

Union leaders have long had an adversarial relationship with AT&T, which has cut jobs from its wireline services in recent years. Bill Henderson of the Communications Workers of America said he's concerned about the sale. "I don't want to prejudge the situation before we get to even sit down and meet Frontier," he said, "but I do have some serious concerns based on what I've talked to my counterparts around the country. You can't provide service without having good qualified people to do the work."

The sale will be subject to regulators' approval. If it gets those permissions, it should close in the second half of 2014.