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Verizon Seeks $2.5B From Data Center Sale – Report

Operator is said to have put 48 data centers up for auction just weeks after dismissing reports it was looking to sell its enterprise unit.

Iain Morris

January 6, 2016

2 Min Read
Verizon Seeks $2.5B From Data Center Sale – Report

Verizon Communications is hoping to raise more than $2.5 billion from a sale of its data center assets, according to a report from Reuters.

The report, which cites sources close to the matter, says the operator is auctioning some 48 data centers that currently generate EBITDA of about $275 million.

Verizon Communications Inc. (NYSE: VZ) appears eager to reduce its asset base and focus more heavily on its core services business, having already sold parts of its fixed-line operation and some of its mobile towers last year.

In November, Verizon was reported to be looking into a $10 billion sale of its enterprise unit, prompting speculation that it had given up trying to compete against web-scale players in the market for cloud services.

However, Verizon CFO Fran Shammo quickly dismissed those reports as "fact-less conjecture," telling attendees at a Wells Fargo conference that there was "no foundation behind these comments." (See Verizon CFO Dismisses Enterprise Sale Rumors.)

For more data center-related coverage and insights, check out this dedicated content channel here on Light Reading.

Operators including AT&T Inc. (NYSE: T) and Verizon have already given up fighting web-scale giants in the market for public cloud services, instead choosing to focus on providing secure connections to hybrid clouds.

According to Heavy Reading principal analyst Caroline Chappell, operators' asset requirements will change dramatically in the coming years as they base their cloud service offerings on SDN and NFV technologies.

"Telcos won't need so many big, centralized data centers to run them -- but lots of smaller, distributed locations that take advantage of their network footprint," she said in an earlier Light Reading story. (See Verizon Enterprise Sale Would Signal Big Shift.)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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