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.
The 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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