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The Edge

Equinix eyes purchase of BCE's data centers – report

Data center giant Equinix is preparing to purchase 17 data centers from BCE, according to a new analyst report. BCE is Canada's largest telecom company and offers services through the Bell brand.

BCE officials did not immediately respond to questions from Light Reading on the topic. Equinix officials declined to comment on the report.

Citing unnamed industry contacts, the Wall Street analysts at Cowen wrote in a note to subscribers Monday that they believe Equinix is raising money to pursue the purchase. They cited Equinix's announcement Monday of a $1.25 billion public offering. In its release, Equinix said it is "currently in advanced discussions with a seller to acquire selected data center sites and their operation" and that the funds would be used for the acquisition, if it closes.

In the company's quarterly conference call with investors, Equinix executives indicated the company remains open to acquisitions and international expansion. Indeed, Equinix recently closed its acquisition of Packet and, separately, inked a $1 billion joint venture in Japan to build data centers there.

On its website, BCE boasts of 28 data centers across Canada.

A BCE sale of its data centers to Equinix has precedent. Verizon sold around 29 data centers in 24 sites to Equinix in 2016 for $3.6 billion. Separately, AT&T sold its own data center colocation operations and assets to Brookfield for $1.1 billion in 2019. The sales essentially highlighted the withdrawal of telecom companies in general from the data center business.

However, that doesn't necessarily signal the end of telecom's interest in data centers and cloud computing. For example, Verizon, AT&T and other big telecom operators have begun working in the edge computing space: Verizon inked an edge computing partnership with Amazon late last year, while AT&T has been working with Microsoft in its growing Azure edge computing operation.

Although edge computing is in its early stages, some believe the persistent interest in it could have significant implications for the way Internet traffic is routed, and how operators design and run their networks.

Edge computing is an area that has already drawn investment from Equinix – Packet, acquired by Equinix last year, is a major player in the nascent edge computing space.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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