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Frontier Inks Deal with TRG

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One of the leading communications provider Frontier Communications (FTR - Free Report) signed a deal with Washington, DC-based TRG Customer Solutions. Per the agreement, Frontier Communications will offer three of its Frontier Secure products, namely comprehensive computer security, cloud-based unlimited backup and sharing and proactive identity protection to TRG.

The portfolio of Frontier’s Secure division is directed towards protecting digital lives and its products that are available across 50 states. With Frontier Secure's better infrastructure and advanced methodology, the company expects to generate improved revenue, a smooth operational base, greater customer satisfaction and lower costs.

Management of Frontier stated that these products support the solutions offered by TRG and will enhance its level of reliability. On the other hand, TRG group remains highly upbeat about this collaboration and expects to reap results in the coming days.

Focused on providing services to rural areas and small and medium-sized towns, Frontier offers attractive value-added service packages to local access line customers. The company is also progressing well in profitability management and cash flow through reductions in operating expenses and capital expenditure. We expect Frontier’s business tie-up with AT&T (T - Free Report) to bring in more revenue for the company in the next few years.

However, intense competition from other industry players, a highly leveraged balance sheet, regulatory pressure as well as integration risks in converting the acquired properties into its own system might limit the company’s earnings potential in the upcoming quarters.

We maintain our long-term Neutral recommendation on Frontier. The company has a Zacks #3 Rank implying a short-term (1-3 months) Hold rating.

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