Frontier, American Tower Take Home Slices of Verizon

February 6th, 2015 by · 2 Comments

The rumors of Verizon asset sales turned quickly into reality yesterday after the markets closed. Frontier is spending $10.54B to acquire Verizon’s California, Texas, and Florida holdings, while American Tower is buying Verizon’s tower portfolio for $5.06B and of course leasing it back to them.

TRImage_269 Feb. 06The interesting piece of the Frontier deal is not what is similar to the last deal these two did for wireline assets, but what is different. These assets aren’t so much of the rural copper variety, they have some or part of some major markets (Dallas, Los Angeles, Tampa) and plenty of FIOS customers.

When complete Verizon’s ILEC footprint will be reduced to its core, contiguous eastern territories (VA, DC, MD, PA, NJ, NY, MA, RI, DE, CT).  Let’s just call it Bell Atlantic again perhaps?  Haha.  One wonders whether Verizon would like to sell the last piece too and be done with the wireline last mile entirely — at least at the consumer level.

On the tower side, American Tower is buying 165 actual towers and the rights to some 11,300 more. The sky-high multiples in the tower business make this an attractive way for Verizon to monetize some assets for sure.  The accompanying lease starts with an even 10 years.

Is Verizon done now? For now at least, I think. The funds will go toward paying off the debt they’ve been racking up (or planning to) on the other side of the consolidation table.  I’m sure they wish they had more.

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Categories: ILECs, PTTs · Mergers and Acquisitions · Wireless

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2 Comments So Far

  • andrew says:

    Would really like to hear what Frontier intends to do with these new FIOS customers. They’ve been lukewarm with the previous round to downright hostile on the FIOS TV portion.

    They also have a big mismash of FTTH, FTTN, and conventional DSL deployments. Any unified strategy going forward or is it just keep treading water with what they’ve inherited?

    Finally, Frontier’s CEO said last year they would be offering gigabit service in several markets sometime this year. Is that still going to happen or will this digestion delay that rollout?

  • Steve says:

    Based on Frontier’s MetroE deployments I suspect they will just continue with whatever last mile architecture is in place for a given market.

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