AT&T Mobility (NYSE:T) signed an agency agreement with regional wireline provider Frontier Communications, allowing Frontier to provide AT&T smartphones and wireless service to its customers. The deal is another indication that wireless carriers are looking for incremental subscriber growth beyond the traditional retail channel.
The two companies said the three-year deal will complement Frontier's current broadband, voice and satellite TV offerings. AT&T and Frontier plan to trial the offering in the first half of 2012 and then expand it throughout Frontier's footprint, which is offered in 27 states. "This was a natural extension of a product that we are not currently offering that would fit well with our product suite," Steve Crosby, Frontier's senior vice president of government affairs and public relations, told FierceWireless. He said the deal will allow Frontier to leverage AT&T's wireless resources and will give AT&T to attract "customers they may not already have or customers they would like to have."
An AT&T spokeswoman said that Frontier will sell AT&T-branded products and services, but declined to elaborate. "It's a great fit for AT&T," she said. "Frontier is a great provider with a strong record of providing bundles services."
Crosby said Frontier hopes to have the service rolled out to its entire footprint sometime in 2012. The service will be bundled with Frontier's other offerings, though Crosby said pricing has not be determined. He also did not say what type of AT&T devices or services will be offered to Frontier customers or whether there would be any restrictions. "The goal would be to have all that is currently available to AT&T customers," he said.
AT&T's deal with Frontier appears to be similar to one that CenturyLink has with Verizon Wireless (NYSE:VZ), in which CenturyLink acts as an authorized Verizon retailer. It is also indicative of carriers' efforts to squeeze more subscriber growth from indirect channels. Sprint Nextel (NYSE:S) said this week that it plans to increase the number of wholesale customers by 10 percent over the next year.
Recon Analytics analyst (and FierceWireless contributor) Roger Entner said the deal for AT&T is about securing incremental revenue growth. For Frontier, it is about getting customers who want the simplicity of one bill to sign up for another service. Adding wireless to the bundle will enhance the "stickiness" of those customers, he said.
However, he said there are fewer and fewer companies for wireless carriers to sign these types of deals with. "We're kind of running out of the agents," Entner said. "The only agents left are the cable guys and they failed miserably in reselling wireless. The CLECs are also competitors on the business side."
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