Verizon Aims to Unload Yet More Copper

January 14th, 2015 by · 1 Comment

According to Verizon's CEO the other day at a Citi conference, the telecom giant is looking at ridding itself of even more of its wireline network assets:

"There are certain assets on the wireline side that would be better off in somebody else's hands so we can focus our energy on a narrower geography... In the past we have sold off entire states, but I think there's an opportunity to trim out some markets in a state and hold onto other markets in a state."

In other words, anybody want some copper? One market, a dozen, maybe just a neighborhood? Let's make a deal!

It's been almost 5 years now since Verizon sold off 14 markets to Frontier, and 7 years since they sold northern New England to Fairpoint. In the markets they haven't sold or built out FIOS in force, there has been a constant murmur about moving people off of copper and onto alternatives like LTE, one way or another. There has been no move to restart the FIOS expansion, and meanwhile the copper business just feels heavier every day I guess.

I think they'll find it a bit harder to find a buyer this time. I don't know if Frontier or Fairpoint is ready for another meal of copper.  Fairpoint is still recovering from the last one, and Frontier is kind of busy integrating AT&T's Connecticut assets. CenturyLink seems more interested in its cloud than in adding more ILEC territories.  And Windstream's REIT effort wouldn't mean much, as Verizon isn't looking to dodge taxes but rather operations, and that's not what REITs are about. To get any of those four interested, the offering price will have to be aggressive.

Perhaps that's why Verizon is looking at its assets piecemeal -- it's the smaller RLECs and ILECs that they hope might be ready to expand inorganically. If they're right, AT&T will surely hop on the bandwagon.

Categories: ILECs, PTTs · Mergers and Acquisitions

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