Verizon explores sale of enterprise assets worth around $10 bn
07 Nov 2015
US wireless carrier Verizon Communications Inc is exploring a sale of its enterprise assets worth around $10 billion, as part of its plan to focus on its core business, Reuters today reported, citing people familiar with the matter.
The sale would include the business formerly known as MCI, which provides landline and Internet services for large business customers, and Terremark, its data centre unit, the report said.
Verizon had acquired MCI in 2006 for $8.4 billion, and Terremark Worldwide Inc in 2011 for $1.4 billion.
Verizon's enterprise assets may not be easy to separate and any potential buyer would likely have to sign commercial agreements with the company, and Verizon is still mulling ways as to how these assets could best be structured, the report added.
The proposed sell-off comes at a time when Verizon is working to pay down debt and cover the $10.4-billion it has to pay for the 181 wireless licences it bought in the government's spectrum auction that concluded early this year.
Rival AT&T which had acquired spectrum worth $18.2 billion in the auction is also believed to be arranging the funds through borrowings and asset sale.
The company's debt burden had increased substantially following its $130-billion buyout of Vodafone Group Plc's 45-per cent stake in their US joint venture (See: Verizon buys Vodafone's US joint venture for $130 bn).
Earlier in January, Verizon's chief executive Lowell McAdam indicated that the company may sell some of its landline assets.
''There are certain assets on the wireline side that we think would be better off in somebody else's hands so we can focus our energy in a little bit more narrow geography,'' Adam said.
In February, Verizon agreed to sell its residential landline assets to Frontier Communications for $10.54 billion, and ts tower portfolio for more than $5 billion.
New York-based Verizon is one of the largest telecom companies in the world with revenue of $127 billion in 2014.
In the fourth quarter, the telecom giant reported 7 per cent increase in revenue at $33 billion. Wireless business contributes approximately 70 per cent of the group's revenue.
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