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Verizon Plotting Tower, Wireline Sale – Report

Dan Jones
2/3/2015

Verizon may reportedly be gearing up to sell cell towers and wireline assets for up to $15 billion to pay down debt and spectrum auction costs.

The Wall Street Journal quotes sources saying that Verizon Communications Inc. (NYSE: VZ) is pulling together an asset sale that could be worth up to $15 billion to cover debt to acquire complete control of Verizon Wireless from Vodafone Group plc (NYSE: VOD) for $130 billion, and its winning $10.43 billion bid on AWS-3 spectrum last week. (See Vodafone Agrees to $130B Verizon Stake Sale and Hey Big Spenders! AT&T, Dish & VZ Splash Cash on Spectrum.)

Initial down payments on the winning bids are due by February 13, with final payments due on March 2. This suggests that Verizon will want to wrap up any sale quickly.


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Verizon has up to 15,000 towers, according to Cowen and Co. A sell-off could net Verizon up to $5 billion, JP Morgan Chase stated last December. Any wireline sell-off could then add up to $10 billion to the deal.

Crown Castle International Corp. (NYSE: CCI) must be considered one of the leading contenders to buy up Verizon's cell towers. The company has already inked similar cell tower buyouts with AT&T Inc. (NYSE: T) and T-Mobile US Inc. Sprint Corp. (NYSE: S) also leases space on more than 2,000 Crown Castle towers in the US. (See AT&T to Sell, Lease Cell Towers for $4.85B and T-Mobile USA in $2.4B Towers Deal.)

Crown Castle has the largest network of shared infrastructure in the US with 40,000 towers that cover 71% of the top 100 markets in the US. American Tower Corp. (NYSE: AMT) is the next largest player in the US with more than 28,000 towers across the country.

The wireless and wireline assets are likely to be sold off to separate bidders.

Verizon's shares are up 47 cents -- or 1.60% -- at $47.71 Tuesday afternoon.

— Dan Jones, Mobile Editor, Light Reading

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steve q
steve q
2/4/2015 | 9:20:50 PM
Re: Light Spending
I see this as a way verizon is looking at what Google has in plan to move into verizon area. If verizon does not push fios into town that have the money to push out better data service to the customer, the game of 4glte is dead.
MordyK
MordyK
2/4/2015 | 2:48:31 PM
The path to network sharing/parity
It used to be that carriers protected their sites as a competetive barrier againts a competitor gaining coverage parity, but selling off sites means that others can deploy the same network coverage. This is in theory if not in effect lays the business groundwork for more network and site sharing where appropriate, such as small cells.
KBode
KBode
2/4/2015 | 2:15:26 PM
Re: Wireline stuff
Well Frontier and Fairpoint had their bite (and got bad digestion as a result); CenturyLink is probably  the next in line to acquire at least some of these assets I'd think. In fact rumors that CenturyLink is buying some assets in TX, CA and FL has been the Verizon employee rumor du jour for quite a few months now.
brooks7
brooks7
2/4/2015 | 11:17:30 AM
Re: Wireline stuff
Dan,

The IOCs and Verizon run so differently those of us who have worked with both new there were going to be huge issues with integration.  So, who would buy depends on the actual asset.  

seven

 
DOShea
DOShea
2/4/2015 | 10:18:16 AM
Wireline stuff
I wonder who's really interested in the wireline assets and at what price--at least a few regional telcos had to overcome a lot of operational issues to absorb line acquisitions from Verizon in past years.
pdonegan67
pdonegan67
2/4/2015 | 7:06:05 AM
Light Spending
They're also going to need a dollar or two to fund the lighting up of their aggressive dark fiber to the cell site roll out.
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