Good day and thank you for standing by, and welcome to the Frontier Communications' Investor Presentation. I would now like to hand the conference over to your speaker today, Mr. Sheldon Bruha. Please go ahead.

Good morning, everyone, and thank you for joining us on the Frontier Communications' First Quarter 2021 Earnings and Restructuring Merchants Investor Presentation. I'm Sheldon Bruha, the Chief Financial Officer of the company. Joining me today is John Stratton, Incoming Executive Chairman; and Nick Jeffery, President and CEO. At the outset, I would like to inform you that this presentation can be found and followed within the webcast and is available on the Webcast and Events section of our Investor Relations website. During this call, we will be making certain forward-looking statements. Forward-looking statements by their nature address matters that are uncertain and involve risks which could cause actual results to be materially different from those expressed in such forward-looking statements. Please review the cautionary language regarding forward-looking statements found on Page 2 of the presentation. On this call, we will discuss certain non-GAAP financial measures. Please refer to the presentation for how management defines these measures and certain shortcomings associated with these measures. Reconciliations of these non-GAAP measures to the closest GAAP measures can be found in the presentation. I will now hand the call over to John Stratton, Incoming Executive Chairman of the Board, who will lead off today's presentation.

Okay. Thank you, Sheldon, and thanks all of you for joining us today. Just briefly for those of you that I haven't met, I joined Frontier as a Board observer in May of 2020 and was later named the company's Executive Chairman pending our emergence from bankruptcy. And prior to joining Frontier, I served in a variety of roles at Verizon Communications, most recently as President of Global Operations with responsibility for the $120 billion P&L of the company's network businesses, which included our wireless business, enterprise and consumer, which included, of course, the company's FiOS business, most relevant to where we are here today with Frontier. Let's begin our discussion, I'd ask you to turn to Slide 5. After almost 2 years of hard work, we're excited to be emerging today from our Chapter 11 financial restructuring and expect to begin trading on the NASDAQ this coming Tuesday, May 4 under the ticker FYBR. I'd like to take a moment to thank everyone who helped us to get to this point, including our current Board of Directors, the management team, our dedicated employees and our advisors. Our presentation today is designed to give you a vision of Frontier's path forward, our business today, the opportunity ahead and our strategic positioning in the market. Overall, we hope you leave today with a better understanding of our current opportunity and the transition that we're undergoing to build a new future at Frontier. On to Slide 6. Our future here at Frontier requires a very strong foundation and this begins with an outstanding leadership team, which we built not only by bringing in Nick Jeffery as our new CEO and other key executives, but also a new Board of Directors who I'll introduce in just a moment. Strategically, we're most focused on the expansion of our fiber network, with our initial emphasis on building over 3 million new fiber passings in the very near term. Operational improvement at Frontier is underway. We focused on simplifying and streamlining processes, generating systems improvement to benefit customers and improving efficiency for our employees. We will emerge from Chapter 11 with a strong financial position, significant liquidity, low leverage and strong cash flow that will support us as we continue deploying fiber throughout our nationwide footprint. On Slide 7 as we've mentioned, we've been able to attract exceptional talent and have recently added 2 industry-leading executives as you see here on this slide. Nick Jeffery, our CEO, is a telecom industry veteran with over 30 years of deep operational expertise and leadership experience. Nick joins Frontier from Vodafone where he most recently served as CEO of its UK company. This was a business that historically had performed quite poorly and for many years was losing share, outdone by aggressive competitors, its brand perception tarnished by substandard customer support. Under Nick's guidance, the company engineered a substantial transformation and turnaround, driving wireless market share growth, improving service delivery and re-energizing the brand. In addition to repairing its wireless business, Nick also launched a consumer broadband service and rapidly it became the UK's fastest-growing provider gaining over 1 million customers and the highest-rated brand NPS scores within 3 short years, clearly an ideal fit for the task ahead at Frontier. Veronica Bloodworth, our new Chief Network Officer, recently joined Frontier from AT&T, where she spent 23 years and helped architect AT&T's IP strategy, yielding 3 million builds per year. Veronica has extensive experience with the planning, design, construction and capital maintenance of fiber networks, having overseen deployment to 14 million customers while at AT&T. Turning to Slide 8, we've spent a significant amount of time and energy recruiting a talented new Board of Directors. This new Board brings a diverse wealth of experience from relevant disciplines. All functional areas are well represented with high levels of subject matter expertise across key areas including digital transformation, brand development, capital investment, operational efficiency and telecom strategy. We're very excited about this new Board and so I'll run you through a quick introduction. In addition to myself as Executive Chairman and Nick, our CEO, we have Kevin Beebe, the Co-Founder of Astra Capital Management and formerly Alltel's Head of Operations. I should note that Kevin has been on Frontier's Board since 2019, including the Finance Committee and the restructuring efforts that we've just completed. Lisa Chang, who is currently Chief People Officer at Coca-Cola; Pamela Coe, the Former Deputy General Counsel and Corporate Secretary at Liberty Media; Steve Pusey, the former Global CTO of Vodafone; Maryann Turcke, who is the former Chief Operating Officer of the National Football League; and Prat Vemana, who is currently the Chief Digital Officer of Kaiser Permanente. These leaders will work diligently with the management team to drive a clearly defined set of immediate objectives critical to Frontier's path forward. So what does Frontier look like today and how do we think about this business. If you move to Slide 9, I'll try to answer this here. Our new future starts on excellent footing. We believe that Frontier has the foundation to become the largest U.S. pure-play fiber provider, which Nick will cover later in the session. Going forward, our story is based on 2 primary components: our base fiber network and our expansion fiber network. Simply put, the base fiber network is fiber that's in the ground today, already generating solid cash flow. The expansion fiber network is the unique and significant opportunity that we have to convert our cache of millions of copper locations into fiber, replicating a proven and successful model to unlock massive value. On Slide 10, just a bit more about what's in place today, to illustrate each of these assets a bit more specifically. Network passings, on the left side of the chart, include both consumer and commercial locations. As of March 31, we served 11.8 million copper locations. With fiber, we passed 3.4 million total locations, most of which are the 3.2 million passings in our base network, which we define as all of those built prior to 2020. We plan to ring-fence these 3.2 million passings going forward and we'll continuously inform the market how we're doing there. This should serve as a reference for you as you model our business. How are we doing on penetration, ARPU? It's a means for you to understand not only how these markets are faring but also to update the inputs you use as you model the potential of our new fiber build. The expansion fiber network is everything we built from January 2020 forward. To date, we've built 200,000 of these passings. But we're just getting started. Going forward, as these networks are deployed, you should expect us to inform you of our progress on the pace of our build and the level of demand we generate to fill in penetration by cohort. Lastly, as we upgrade our copper customers to fiber, you should expect the copper passings to decline as copper Internet or DSL broadband will generally not be offered after the upgrade and the locations here will be reclassified as fiber. We'll take a closer look at our fiber network, on Slide 11. Our existing fiber network generated $2.6 billion of revenue with roughly $1 billion of adjusted EBITDA in 2020. On both metrics, that's about 40% of our overall business excluding subsidies. And while our future maybe in fiber, we still have roots in copper. Our copper business generated $3.8 billion of revenue and $1.4 billion of adjusted EBITDA last year. Over time, we expect to aggressively shift our business mix with a larger percentage of both revenue and margin coming from fiber as we implement our expansion plan. Turning to Slide 12. Our plans are built on the substantial foundation of this expansive existing network of fiber, our base fiber network. As described, this base network is already well established with 1.3 million customers and penetration approaching 42%. To enhance and further develop the power of this network, we focused on 3 core value drivers: penetration gains, ARPU accretion and increased cost efficiencies. On penetration, over time we believe we could achieve a penetration rate of 50%, which alone will substantially increase the value of our fiber network. Let me take you further into this point on Slide 13. We see a clear correlation between valuation and penetration. Companies that are able to achieve greater levels of penetration are clearly more highly valued by the market. Using the trend line in this analysis implied by our peers and our current penetration of roughly 41.5%, our analysis yields an implied enterprise value for existing base fiber network of $11 billion today. As we aspire to move up into the right and as we seek to approach 50% fiber penetration in the near term, it will drive further value growth for our shareholders. We feel confident in our ability to meet that target for a number of reasons. Many of our cable peers who are north of 50% penetration today have a product that is arguably inferior to the products and services we'll offer on our fiber networks. When we acquired much of our fiber from Verizon, penetration was in the high 40s, even approaching 50%, which then dropped sharply in subsequent years due to significant operational challenges. Our recent operating initiatives have resulted in 7 consecutive quarters of positive net adds and increased fiber penetration. We have much more to do here, but it is an encouraging reversal of our prior trends. And like our peers, we will continue to evaluate ways to increase profitability in all aspects of our residential, commercial and wholesale businesses for the benefit of our shareholders. And bringing the methodology discussed on Slide 12 and 13 together on Slide 14, our 3.2 million base fiber passings today translate to $11 billion of implied enterprise value as described by the trend line on that prior slide. This methodology would imply roughly 11x EBITDA multiple for our fiber business. Together with our copper business, that equates to $15 billion of implying the total EV today. If we're able to increase our fiber penetration to 50%, it would drive that value to $14 billion for the fiber network alone, implying a total EV of $18 billion when including the copper network. It's important to note this analysis doesn't include any additional upside from our expansion plan. That's to say, if our fiber footprint remained exactly constant and we only work to increase one dimension: our fiber penetration, our business can achieve a valuation of $18 billion. While we expect the value of our copper business to decrease and negatively impact total potential EV, there is substantial upside when taking these 2 networks together as we work to at least double and potentially triple the size of our fiber network over time. There'll be more on this in the following slide. So, as we look to the future, we have an exciting opportunity to further our growth. We've identified over 10 million additional locations where we can build out fiber with very attractive financial returns. However, we've done more than just identified. The build-out of the first 3.4 million of those passings is fully underway with 200,000 already constructed. You'll hear much more about that from Nick in just a moment. We have strategically prioritized our build-outs to target highest IRR projects first to maximize value. The 3.4 million builds currently in progress are expected to produce program IRRs of at least 24%. The next sphere of opportunity and the speed with which we'll accomplish the whole of our builds is currently being evaluated in a strategic review. We recognize that time to market is an absolutely critical success factor and to that end, Nick and his leadership team are driving 2 critical questions, how far and how fast. This work by the management team in conjunction with our new Board will be completed over the next 100 days. We plan to share the outputs of this process and the shape of our ambition in an Investor Day that will be held in August. In addition to framing the size and speed of our fiber investments, as referenced earlier, we're also generating additional disclosure metrics to complement our story and better communicate the value proposition of our assets to the market by giving you an overview of this significant value creation opportunity for Frontier post emergence. I'd like to turn the call over now to our new CEO, Nick Jeffery to introduce himself and provide more detail on our strategy why Frontier is well positioned to succeed. Nick?

Thank you, John. And before we get into the detail on Slide 18, I'd just like to take a minute, if I can, to say that I decided to join Frontier because of the enormous opportunity I see for the company to create value. Frontier today has a solid foundation of owned fiber asset, a significant customer base and strong competitive positioning. This enables Frontier to win in key markets and to successfully execute on a unique investment opportunity to create shareholder value. Our network spans 25 states with a 180,000 fiber route miles, making it one of the largest fiber networks in the United States. This gigabit-capable network passes 3 million residential homes or 3.4 million total passings with greater than 41% penetration where we build fiber today. We've positioned ourselves as one of the U.S.' largest local exchange carriers. In the last 12 months, we generated $7 billion of revenue and $2.8 billion of adjusted EBITDA, which represents a 40% adjusted EBITDA margin. From a competitive standpoint, we've proven that we can win market share where we have fiber. Furthermore, almost the entirety of our homes passed face one or no broadband competitors, giving us a significant opportunity to build upon the strong foundation of our current network. I joined Frontier well aware of the issues that the company has faced over time and with a sense of real urgency to bring about change to help improve execution and make smart investments for the future. Our fiber-centric future for Frontier is economically desirable, operationally deliverable, and we believe our unique market dynamic make us well positioned to win. Frontier's purpose is to be a leader in building gigabit America. We will connect more rural areas, upgrade our lower network speeds, make quality Internet more accessible and play our role in providing the U.S. with the digital infrastructure it needs to succeed over the coming years. Moving on to Slide 19. As we look to capitalize on our attractive fiber assets, favorable industry dynamics will continue to provide tailwinds to our business. Not only are data speeds continuing to get faster but customers are continuing to consume data at a faster pace. The number of connected devices inside the home application, downloads on mobile devices and demand for over-the-top video are expected to increase at double-digit growth rates over the next several years. We believe these industry dynamics together present the perfect opportunity for high-speed fiber network operators like ourselves to profitably grow our business. On Slide 20, we believe fiber is the best product to meet this rising demand for data, not only due to its superiority to alternatives like cable today but also because we believe it will maintain its superiority in the years to come. Today fiber has 34% faster download speeds, 17.6x faster upload speed and 42% lower latency levels than cable. This means fiber is the perfect technology to support the rising demand we've seen for home video conferencing, the need to upload and share large files to the cloud, and for low-latency applications like gaming. Looking forward, fiber will continue to outpace alternatives, featuring symmetrical download and upload speeds and a clear path to 10-gigabit services. Our assets have longevity. The fiber we are laying today will last up to 50 years and will cost less to maintain than alternatives. And Slide 21 illustrates the U.S. broadband market is uniquely primed for explosive growth. There are approximately 128 million homes in the United States today, only 30% of which are currently passed by fiber. In contrast, Europe's rollout of fiber is more advanced than in the U.S. with many countries now about 80% fiber passing inside the homes. With this backdrop, the U.S. companies that can execute on fiber deployment should create significant value for their shareholders. We truly believe fiber-to-the-home will be the most important digital infrastructure for the U.S. over the next decade. Moving on to the next slide, it's clear that the market had already acknowledged this opportunity as reflected in the robust valuations that the overbuilders those have attracted. Over the course of the last 24 months alone, we've seen EV-to-EBITDA multiples with a value about 20x, reflecting this market sentiment. And fiber-centric companies such as Frontier can be right in that ballpark, now more than ever given our right-sized balance sheet, strategic upgrade plan and resulting potential for tremendous growth. On Slide 23, we show key statistics on our fiber network through the lens of our entire business. Frontier today is one of the largest fiber-to-the-home platform in the United States. We have over 3.4 million total fiber passings today and, as John has covered, plans to at least double this footprint over the coming years. Within our footprint, we are well positioned competitively. Today 88% of our fiber footprint has one or no competitors. Penetration in these markets could improve significantly as consumer demand for bandwidth in the home continue to accelerate. Similarly, 87% of our copper footprint had one or no incumbent wireline competitors suggesting that the penetration potential from fiber buildout should be significant. The demographics in these markets are also favorable as a majority of these market are growing and exhibit higher than average household income with a younger population, correlating partly with higher broadband usage. One of the most important points I want to cover is our advantage in deploying fiber as shown on Slide 24. As an incumbent, Frontier has several advantages in building our modern fiber network including existing rights-of-way, fiber network infrastructure, conduit and procurement and of course economies of scale. We are able to use these advantage to yield lower build cost, faster network deployments, more effective penetration and more efficient planning processes. We have a terrific work force of thousands of employees to build this fiber rapidly, which new entrants or smaller players cannot easily replicate. Taken together, it's clear that Frontier has the scale, resources and established network to build at a competitive advantage to other players. Turning to Page 25, we're already seeing evidence of our advantages playing out in the business today. We've seen 7 consecutive quarters of positive consumer fiber net adds. We are accelerating the construction of new fiber and our penetration is increasing with a clear path towards 50% plus penetration which again we believe will translate into significant value creation for our shareholders. On the right, we can see our focus on the customer experience has begun to share result with residential fiber churn has been decreased from 2.7% in the third quarter of 2019 to 1.4% today. We expect to continue to improve churn as further operational efficiencies and improvements are implemented. Moving to the next Slide. We are going to accelerate initiatives already in place over the course of 2021. We're focused on maintaining and accelerating the positive momentum in penetration, churn and ARPU, the right-sizing of our fiber. The business has been evident for several quarters and we have every intent of exceeding the prior calls performance on fiber. We are equally focused on cost, aggressively looking for all opportunities to reduce expenses. Investments are being made, both in the ground as we build fiber, but also in gross adds, as we welcome new subscribers onto our growing network and video will remain on hold reflecting changing due to habit, and then move to over-the-top television. Looking forward, we have already taken proactive steps to improve the business. Most significantly, we have reviewed our carrier relationships with key business partners resetting current pricing contracts in exchange for a higher share of future more sustainable revenue opportunity. This will improve our competitiveness in the market. And while it does result in a decline in revenue per 2021, this change will be offset by volume gains and NPV positive. A value creation net win for Frontier. That said, secular trends were continuing copper revenues and overall of customers we've always land on. We are aggressively targeting data products and the conversion of copper to fiber in response. And further, our investment in fiber and driving new customer adoption will be a commensurate investment in gross adds as we target further penetration gains and ultimately set the course for our future as a modern data provider. Whilst it is relatively early in my tenure at Frontier, it's clear to me that we have set our 2021 objectives in full alignment with both the realities and opportunities in our business. Secular headwinds are not being ignored and the team have a long-term focus that can leverage all elements of the business, whether in decline or on the rise to deliver a return to globe and generate substantial stakeholder value. This outlook on our 2021 business drives the guidance we're providing and [indiscernible]. Notably, we expect decline in EBITDA driven by voice revenue decline. We have an established track record of managing operating expenses, so this adjusted EBITDA is mostly topline business. The most compelling part of 2021 is fiber growth. This is headlined by our target to build 495,000 new fiber locations over the year and you'll note the capital expenditures increased year-over-year, driven mostly by these expansion initiatives. And as John has already mentioned, we are undertaking a full strategic review of our business so the level of our fiber builds here is our baseline. We plan to provide updates to this during our August Investor Day. As I mentioned earlier, Frontier's purpose is to be a leader in building gigabit America. We will connect more rural areas, upgrade our lower network speeds make quality Internet more accessible. We will have more to share on this at our Investor Day in August and I'm very much looking forward to coming back to you about points with further details on our vision and plans of the Frontier. Looking forward, it's clear we have a lot to do, but I could not be more excited by the opportunity ahead. I'll now hand over to Sheldon to go into more detail on our financial performance. Sheldon, over to you.

Thank you, Nick. Our first quarter results were in line with our expectations with progress in several key areas, but still a lot of work to do to transform the business and realize the potential that John and Nick outlined the results included a seventh consecutive quarter of positive net additions to our fiber broadband service. During the quarter we had 11,000 net fiber broadband consumer customers growing penetration of our existing network in addition to adding customers on the upgraded fiber footprint, we began deploying last year. Our net debt improvement is aided by a significant improvement in churn versus prior periods. Consumer-customer churn was 1.45% with strong improvements in both fiber and copper broadband churn. Our churn performance was aided by several initiatives to improve the profile of our customer acquisitions including recent initiatives to no longer sell low-speed offerings of 1-3 megabits of our copper broadband, but historically had high rates of churn and challenging customer lifetime value. Before turning to the financial performance, a highlight, we had another active month in April on our capital structure as we access the capital markets again to further improve interest expense and liquidity for the company in advance of margins, which I'll be reviewing further in a moment. Turning to slide 31, I'll make a few comments on the financial performance for the quarter. The prior year periods have been adjusted to exclude the contribution from the North West operations, which were sold exactly 1 year ago. So all comparisons here on an apples-to-apples basis. Total revenue was $1.676 billion, a 6% decline from a year ago. Looking at revenue performance by product, total data and Internet services revenue declined modestly against prior year. So within that category, our fiber broadband revenues grew by $19 million or over 8% reflecting the operational focus and upside potential of this business. As I mentioned, both fiber and copper broadband products have materially improved churn performance reflecting recent churn reduction initiatives and this is doing quarter in which we implemented price increases on both existing and new broadband customers. Operating expenses declined $96 million versus prior year, reflecting continued cost management, including content cost improvements as we renegotiated for growth premium content channels. Our adjusted EBITDA margin improved to 40% versus 38.4% 1 year ago. We expect the margin to decline during the remainder of 2021 as we ramp up gross add activity on our fiber network resulting in increased operating expenses and as we incurred near term pricing impact of our strategic repositioning in our wholesale business. Moving onto our capital spending on Slide 32, in the first quarter we built fiber to approximately 100,000 new locations. This is more than the total number of locations, we built in all of 2020. This demonstrates the pace of our fiber upgrade program as we ramp activities to deliver the 495,000 new fiber locations in 2021 that Nick mentioned earlier. We continue to be pleased with the results we are seeing in both the cost of the build and the early penetration of the footprint and we intend to provide more details on this important aspect of our transformation during our Investor Day, we'll be planning later this summer. Turning to Slide 33, we've also done a considerable amount of work on our capital structure. This work was not just confined to the reorganization transactions that were approved as part of our Chapter 11 cases, but we were extremely opportunistic in the capital markets as well. During the last 6 plus months, we refinanced all $5 billion of secured debt issued by our parent company. In some cases, we finance it that a second time within this time period. Not only does this result in significant interest expense savings of just over $75 million per year, but also extended our debt maturities. As you see here on the Slide, we've worked to ensure we remain as unencumbered as possible as we focus of our expansion plans and fiber build putting our sales of any funded debt maturities until 2027. I also want to note that there are a couple of last piece of the capital structure that are being finalized at emergence. As part of our Term Loan repricing earlier this month, we raised an additional $225 billion via an add-on to that facility. That add-on will close today providing us additional liquidity. Secondly, the $750 million of kickback debt will be issued today. The interest rate coupon on the second lien take back debt will be 5.875%, a significant improvement over the 6.75% coupon of the carrier pursues secondly notes that we issued in November. Moving on to my last Slide, the work we've done on our capital structure provides us the financial flexibility to execute on our expansion plans. With a $625 million revolving credit facility largely unutilized and approximately $800 million in post-emergence cash which includes the $225 million from the turn on add-on, we expect to have approximately $1.3 billion in liquidity at emergence. But not only are emerging strong liquidity, we are also emerging with industry-low levels of net leverage of 2.2x. So we're well positioned financially to become the frontier in the future. With that, I'll turn it back over to John for closing comments.

Okay. So in summary, Frontier emerges later today with a host of advantages as we seek to rebuild our business, the solid foundation of critical telecommunications infrastructure including fiber-rich assets such as a 3 million plus homes passed already in place, an opportunity to grow much further. We enjoy strong industry fundamentals and strong tailwinds and this provides us great opportunity to grow the business further. Perhaps most importantly, all of this comes with a commitment to improve the customer experience. We have an opportunity to rebuild our brand and it starts with the customer, the service that we provide, the ability to deliver great value that's recognized both by our customers as well as the industry at large. And finally, our restructured balance sheet provides us the flexibility to pursue our ambitions with great optimism. So that concludes our prepared remarks. We'll now open the call for your questions. Operator?

[Operator Instructions] Our first question is from Greg Williams from Cowen.

Great. I appreciate the color today. If I could put 2 data points together on the presentation, one, John, you mentioned time to markets is the essence, how far fast and getting up to speed as quick as possible on the build-out. And then I think on slide 22, you are mentioning the amount of PE and infrastructure funds that are just a lot of capital and entering the space. So timing is of the essence and you want to build out as fast as possible. Would you be willing to sell some of your copper assets to accelerate the fiber build? And the second question is, we're hearing some conversation about resource constraints and delays, chip shortages, network equipment capacitors yesterday and consolidate its call mentioned resin for the conduits and even the workforce in an AT&T said that there are a little bit skittish about delays, are you seeing any possible delays in the rollout due to these constraints?

Yes. Thanks, Craig, for your questions and I'll hit them in reverse order. First on supply chain, we've been stepping our pace off as it was evidenced in the commentary that Nick had and the expectation is that we'll continue to ramp to build through this year with the exit velocity that would allow us to go even substantially further in 2022. So as of yet, no indication of supply chain issues that would crimp the pace of our build. Obviously, we've got to keep an eye on this, but with Veronica's leadership, our expectation here is to provide with our partners, a longer-term level of commitments, visibility to the size of our build and what they should then be able to plan around which makes all of those elements, both from a material and labor perspective much smoother after the benefit of both us and our partners. Regarding the possibility of selling assets and the like, I'd like to push that question Greg to our August review. Nick is leading a strategic review now that looks at both the size of our build, the speed with which we'll get it done. And then what are the best means for us to think about resourcing that build as you go forward. So we'll push that question to August but recognizing the fact that we see that our ability to move very quickly may have a positive effect in terms of pointing to the over builders to markets that may be less competitive for them as we leverage the advantages that Nick spoke about on cost and time to market.

Your next question is from Phil Cusick from JPMorgan.

I guess 2 if I can. Nick, if you have the cash, how quickly could you build the $3 million lines that you're working on and can you give us a preview of the strategic review of additional lines, what are the criteria you're looking at least?

Yes, thanks, Phil. Why don't I take the one on how quickly and shelving, perhaps you could take us through how we're prioritizing just on how quickly, you heard in the presentation, we have been very fortunate in being able to hire Veronica Bloodworth into the team to lead our networks organization and Veronica came from AT&T where of course she was building fiber at a rate of about 3 million homes pass per year and brings substantial operational experience of the practicalities of ramping up though, what I've already done in Veronica's short tenure at the company is ask her to think about how we can at least double the build right next year. I'd also work through. We've made the physical and indeed capital constraints to find the optimal rate of build to maximize shareholder value and that's what we are focused on throughout this build. So that's work that's already in flight, you can be safe in assuming we will see a material acceleration. But the exact details of that we're going to come back to later in the year. Sheldon, do you want to just talk about how we prioritize those.

Sure, and from prioritization standpoint, clearly, I mean our builds in the early part of this is really focused on the highest IRR potential ones, we kind of going after those first certainly with the sort of within sort of some other constraints, where we are focusing on some of the high priority states as we've been talking about historically the CTFC markets of California, Texas, Florida, Connecticut markets would fall in that prioritization and plus even within that we're trying to identify as much as possible these builds in locations to sort of to build on sort of the scales within those footprints. So we will,-- we are concentrating sort of the densification fiber sort of within further within the states, within the territories, we're building. Thanks.

Your next question is from Jonathan Chaplin from New Street Research.

A question for Nick actually. I think so much of the opportunity that you've laid out will strike investors as very compelling. The big challenge, I imagine, is in execution. It's sort of taking the old Frontier and turning it into the new Frontier. And for those who aren't familiar with your track record at Vodafone. I'm wondering if you can touch on the turnaround that you engineered in the U.K. business there and how it sort of doesn't match the task ahead of you, add Frontier over the course of the next year, where you see the biggest challenges is being in going after the vision that you started to outline here.

Yes, Jonathan. Thank you. Great question, I'll try and keep the focus on Frontier, but just to recap quickly. For the last 5 years, I led the turnaround of Vodafone's head market in the U.K. It was a company about the same size in terms of revenue as Frontier but with a much more complicated product offering both wireless and wireline and services and in a highly competitive market with 4-5 infrastructure competitors and at least 16 retail competitors in a much, much smaller market space than the U.S. That was a company that has been neglected for many years, the brand detracted, revenues were declining, market share was declining in every single segment, NPS was significantly negative, huge IT problems, huge customer service problems and extremely low employee. The engagement. 5 years later on. It was growing in all the segments taking market share in all segments. It is beating every competitor on every metric for 7 consecutive straight quarters, the highest NPS in the company's 33-year history and the best employee engagement in the Vodafone Group and you know when I first spoke to John about Frontier, John actually said to me, hey, you know what Frontier is very similar in lots of ways so Vodafone and that really rang a bell for me because I absolutely loved turning our company around and what I've seen in my first 40 days in Frontier is exactly the same set of thing and the way to get it, it is really to focus on operational basics, really inch-by-inch, model-by-model, improving customer service, making sure that operational excellence is delivered right throughout the build process, making sure that we put through that many small but together significant improvements in IT systems and then build on that with really accelerating the application of digital to automate services to increase reliability to reduce our rights and of course, to produce a much better customer offer. And then the final thing which is an absolute obsession with competition and winning in the market. To be all over every move, every competitor makes, every second of the day and to really be on top of customer trends both as you see them and as you anticipate them and I am completely convinced that it's exactly the same recipe here from there, albeit in a much bigger market, but with much less competitive intensity and indeed a simpler product portfolio. Jon, that I did have answered your questions. I hope I'm able to.

That was outstanding.

Your next question is from Nick Del Deo from MoffettNathanson.

I appreciate you for your presentation and congrats on getting to emergence in the listing. I guess, what needs to happen to get your fiber penetration back up to 50% in terms of service, brand, marketing et cetera and kind of tied into that, how should we think about the 50% penetration in the P times Q framework. Some operators are more aggressive on price to drive volume, some are the opposite. How do you think about that balance?

Yes, thanks for your question, Nick, and Nick Jeffery, I'll ask you to maybe take that one. And particularly on the balance question. We've talked a lot about the pace of penetration gains and the importance, for example, of building the value, the ARPU as we transition to a more broadband centric offering. But maybe Nick just a piece on that new broader thoughts about how we restore proper market share. Yes.

Thanks, John. Thanks, Nick. But the first thing on market share is if I think if we look at a couple of data points just to begin with the first of which is the files network when it came across that was already at close to 50% penetration. Secondly, we have a number of our State Operations today are already at close to 50% penetration. So in a sense, is this possible, is already proven in fact. The question is why is there not been going as it should do, and what do we got to do to get share growing back up again. I think the way to put on key question as well. And the first thing is I think we have to build a really much more compelling customer offer and brands. People don't buy fiber. They buy what fiber does for them in their homes and businesses and that's very much the way we need to start thinking about how we sell and market services that Frontier provides. As people use more data as we all in our lives, we are already seeing people trading up to faster gigabit services and we are already seeing people willing to pay more for that and those 2 things put together is why our fiber has already started pre-thought and we have to optimize that accurately as we could do Market Dynamics and Customer Needs, probably not, have we got the brand being accelerant rather than a break on that probably not that's work in flight work that we're already beginning to deliver, but then we also need to think about the extra services that customers will be willing to buy. So it's not just moving up a price speed ladder, but it's also moving up of value-added services, ladder in the household as well, do people want security, do they want Wi-Fi SIC, do they want mesh Wi-Fi and so on. And then using really sophisticated digital marketing techniques to optimize that mix down to individual household level and I think as we begin to put those things in place as we've already started to, then we'll begin to see a much more active management. Firstly, up of penetration and hopefully up of ARPU as well.

Your next question is from Brett Feldman from Goldman Sachs.

Congratulations on getting through the reorganization process. I'm actually going to follow up on what you were just discussing. In terms of additional services. You did not mention mobile and Comcast and Charter in particular have done very well. Bundling in a mobile offer and they continue to make that a very compelling value proposition, which I think makes the broadband customers very sticky. So I'm curious whether you see, mobile potentially fitting in if you're seeking if you think you need a mobile partner and then a separate question, when I look at the CapEx guidance you gave the year and some of the data point you gave around the cost of the point fiber, it seems like the fiber expansion is actually relatively small component of the capital budget. I'm curious, what's comprising the rest. And are there any legacy capital projects, you may be wrapping up that could allow you to reallocate that budget in the fiber and therefore fund a more accelerated rollout?

Yes. Thanks, Brad for your question and Sheldon, I'm going to pump the capital question to you in just a moment. But as we talk about mobile and the like, this is a topic that make it I have I think between us about 65 years of experience running mobile businesses. Look, I think that it's an interesting idea and obviously it's curious it's informative to keep an eye on Charter and Comcast progress there which has been pretty exceptional. That said, we have a ton of opportunity right ahead of us right now and what we want to be careful about has been not distract the company, as we start the initial base business of building the fiber, expanding our marketing and sales capabilities to rapidly not only build, but penetrate those markets as we build them. I would never say never to an opportunity like mobile, but in the near term, we're going to focus on the bidding up of our primary fiber offerings. But with that said, Sheldon, could you take the first question regarding the capital?

Sure. Thanks, Brett. Within our capital you have the real driver of the increase year-over-year is related to the investments we're doing on the fiber expansion program. I mean the rest of our mix of capital expenditures are going to be around sort of the cost per gross additions and what we're doing to acquire customers, not just the fiber customers but new customers across our business. Our various other network investment initiatives. And on this one, I think maybe to get to your point, we still are investing CapEx related to the CAF program which as people will know sort of the subsidy program ends here in 2022. We have some remaining builds that we are doing here in 2020 -- I'm sorry, in 2021 that will no longer continue beyond 2021 period. So there is a sizable portion of the CapEx spend that will no longer be dedicated to CAF, that they will be essentially available for other opportunities. There is a little bit more investment as well this year as we're coming through some of the emergence as well as some of the introduction of the new leadership in terms of looking at some of our technology platforms and other sort of maintenance spend around the portfolio that has stepped up a little bit this year as well.

Next question is from Simon Flannery from Morgan Stanley.

Can you give us a little bit of insight into the ramp rate of penetration when you do initial passings, I think you've done 60,000 last year? You've had some good results. So what's the kind of the first year kind of trajectory and how does it ramp from there and when do you think we'll start to see the revenue trend starting to inflect higher where it that you're seeing significant improvement in year-over-year declines.

Yes. Thank you, Simon, and Nick in just a moment, I'm going to pass the question to you. But before I do, I want to restate something I mentioned in the prepared remarks earlier, I think that part of your question Simon is really critical and it is one of the more important drivers of success that we're going to need to demonstrate as we move forward here. And so to that end, from a standpoint of our disclosures and the transparency with which we want to run the business, I referenced earlier that the base fiber network that is the 3.2 million subs that are already in place, we're effectively going to put a wall around those from a standpoint of reporting. So as to be able to inform all of you and marketplace broadly about the success we've had in raising penetration beyond sort of its current 41 and change percent and also how we take the other drivers ARPU, gains cost efficiency, expanding margins, et cetera. With the notion that then is a baseline or a reference point for you to consider as you input to your models, the value of the new fiber that we then go and build. As it relates to the new fiber, I think it's important for us to be able to communicate to the marketplace, the pace of our build. And then also the pace of our penetration rates, your very point, Simon, we're still pretty early in terms of the new build and again I'll ask, Nick to comment on this more, but you should expect us to be communicating on a cohort by cohort basis, how do we look at 12 months, 18 months, 24 months et cetera as we go forward and not only for the purpose of our external reporting in our conversations with you, but obviously as mix gearing up his operational engine and the means by which we measure success inside the business and drive our initiatives inside the company. This will be the focus on both sides of that well. Nick, further thoughts on the early stage penetration

Yes, John. Thanks. Great question. It's just a reminder, I mean we already have just over the 41% penetration in our mature base already and of course, as we say the potential to move this to 50% over time. In new areas, we estimate will ramp to about 35% plus penetration over a 4-year cycle and then on beyond that 40% plus and really the key points for future quarterly results. As John said, it's for us to show very clearly the cohort analysis, between the mature base and the new build at different agents, so that we can be clear with you on how penetration is changing and of course, how the cost of debt is also developing as well. So you'll see that in our upcoming quarterly basis.

Could I have any color on the revenue trajectory when you really the kind of the corporate business starts to become you get this crossover effect on the revenue trajectory improves. I know you got cap.

Yes.

We work through some of these re-pricings on the wholesale deals.

Yes, yes. Thanks. I mean I think what you should expect is that the trajectories of the business begin to improve after '22 as you just referenced. There's really a couple of factors here. We have a waiting between copper, its contribution versus fiber. So when is the crossover point right as we do the new build and penetrate those markets? There is also a CAF2 effect. So we'll have that last bit of subsidies falls off and then you'll see the effect of that next year and then we begin to build back and the expectation is the EBITDA trajectory comes first and then revenue you just behind that, as we lever up the new build. This is subject to further evaluation or it should be clear that in the work that Nick is doing right now, we will be calibrating whole of our expectations. So we've talked to a 3 million unit build historically in the last, whatever, 7, 8 months. It is our expectation that we're going to significantly increase that and also the pace of that build and so the result into revenue trajectories and EBITDA will be updated to reflect that new plan as we go. So that's the work ahead, we're down into that in a pretty detailed level already and expect to release more information on that as we get back together in the month of August. So hopefully that's helpful, Simon.

Yes, it’s very helpful.

This concludes today's conference call. Thank you for participating. You may now disconnect. Presenters, please stay online for your post-conference.