Verizon to sell wireline operations, lease towers in deals worth over $15 bn

Verizon Communications plans to ''sharpen its strategic focus'' by selling part of its wireline operations and leasing over 11,000 of its towers in a move that would net the company over $15 billion.

The New York-based company announced yesterday that it had reached an agreement for the sale of its wire-line operations that served customers in California, Florida and Texas to Frontier Communications Corp.

Frontier would pay Verizon about $10.54 billion (roughly $9.9 billion in cash and $600 million in assumed debt) for the business and related assets in those states.

Verizon's assets include 3.7 million voice connections, 2.2 million high-speed data customers, 1.6 million FiOS Internet customers and about 1.2 million FiOS video connections.

According to Frontier spokesman Steve Crosby, Southern California customers would not notice any difference in service in what he termed would be a ''seamless transition.''

Pending regulatory approval, the transaction is expected to close in the first half of 2016.

Verizon had also reached an agreement to lease the rights to about 11,324 company-owned wireless towers to American Tower Corp, which would also buy about 165 Verizon towers for an upfront payment of about $5 billion.

American Tower would be able to operate the leased towers for an average term of 28 years, with an option to buy them.

The proceeds from the sales would allow Verizon to sharpen its strategic focus and invest in its networks and also return significant value to its shareholders through a $5 billion accelerated share-repurchase programme.

"Our long-standing strategy has been to consistently invest in our networks, improve our customers' experience, and develop new products and services while delivering profitable growth. These transactions will further strengthen Verizon's focus on extending our industry leadership position in our core markets and return significant value to our shareholders," Verizon chairman and CEO Lowell McAdam said in a statement.

Under the deal about 11,000 Verizon employees would continue employment with Frontier, post the deal.

Verizon said that the deal did not include the services, offerings or assets of other Verizon businesses, such as Verizon Wireless and Verizon Enterprise Solutions.