FairPoint Sees Stability In New England Telephone AssetsFairPoint Sees Stability In New England Telephone Assets

With most of the agony behind it of switching northern New England telephone customers to new service and systems, FairPoint Communications said this week that it expects to return to normal operations by the end of the second quarter.

The switchover from Verizon Communications to FairPoint began more than a year ago and has been marked by a plunging FairPoint stock price -- from more than $15 a share to less than $2 -- and thousands of complaints from consumers. FairPoint, based in Charlotte, N.C., reported a loss of $8.8 million on revenue of $311.6 million. In the year-earlier quarter, FairPoint lost $10 million on revenue of $349 million.

Verizon wanted to rid itself of the mostly rural assets so it could invest in what it believes are better investments in its Verizon Wireless and FiOS cable units.

While there are still pockets of complaints over its service, FairPoint said it expects to experience a declining rate of cutover-related costs. FairPoint's northern New England service in Maine, New Hampshire, and Vermont represents the bulk of its business, although it operates small telephone companies in other states, too.

"During the first quarter of 2009, we completed an unprecedented cutover to our new systems for the northern New England operations," said FairPoint chairman and CEO Gene Johnson, in a statement. "While the systems cutover has resulted in a disruption to our operations and has negatively impacted or inconvenienced many of our customers over the past several months, measurable progress has been achieved in key areas and we expect to largely return to a normal level of operations by the end of the second quarter."

Johnson said he expects FairPoint will focus on growing revenue in the second half of the year.

Although Verizon's former operation in northern New England has suffered through the switchover, it has fared better than Verizon's former operation in Hawaii, which, as Hawaiian Telecom, filed for bankruptcy a few months ago.

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