Posted on 02/09/2015 6:23:00 AM PST by Spktyr
Verizon wireline operations in Florida, Texas, California being sold for $10B
Verizon is raising a large amount of cash, by selling some of its wireline operations to another company for $10.54 billion. It is not the only transaction Verizon is performing, as it is leasing the rights to some of its wireless towers to a third party, bringing in another $5 billion, with the company also announcing an accelerated share-repurchase program worth $5 billion.
The wireline operation sale hands control of a tri-state area to Frontier Communications, in exchange for approximately $9.9 billion in cash and $600 million in assumed debt. The sale covers the California, Florida, and Texas areas, serving approximately 3.7 million voice connections, 2.2 million high-speed data customers including 1.6 million FiOS Internet customers, and 1.2 million FiOS Video customers, with around 11,000 Verizon employees expected to be transferred over to Frontier. Verizon will still have
Barring issues with regulators, it is expected that Verizon and Frontier will complete the transaction by the first half of 2016.
The transaction concerning its wireless towers is being struck with American Tower Corporation. According to the terms of the deal, American Tower will receive the exclusive rights to lease and operate over 11,300 Verizon cell towers, a "significant majority' of what Verizon currently operates, as well as buying 165 towers outright. Once the 28-year lease is up, American Tower will have the option to purchase the masts based on their "anticipated fair market values" at that time.
Though it is handing over control, Verizon will continue to serve its customers from the masts. Verizon will be subleasing capacity for at least ten years, with the option of extending the term to 50 years. American Tower also has the rights to sublease space on the towers to other carriers, potentially making it easier for Verizon's competitors to expand their coverage areas.
Verizon expects the tower transaction to complete quicker, closing by mid-2015.
The accelerated stock repurchasing plan, on top of an existing three-year stock repurchase plan, has the carrier rebuying $5 billion in common stock. The expected initial delivery will be and expects an initial delivery of shares valued at $4.25 billion, with the repurchase expected to occur during the second quarter.
Landlines are dying fast and little money to be made.
Result of Obama policies .... the great wrecking ball!
I thought Frontier had already bought all the Verizon wireline biz.
You can’t blame Obama for this one-—it’s technology .
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Verizon, shed some of it’s landlines in Maine, Vermont and New Hampshire to a company named FairPoint Communications in 2008. In 2009, Fairpoint filed for bankruptcy protection. The copper land lines up here in NY have been around for many many years. Some have paper insulation, when we have rain, we may loose dial tone, or have excessive noise injected in the line.
There is good reason Verizon wants to shed its copper lines, it costs too much to maintain, and they will not invest any money in upgrading the copper cable. I am surprised that Verizon is selling some of its Fios assets in Texas. They have state franchises for the cable TV part, I thought they were making money on this part.
NOOOOOOOO! I don't want Frontier to get bigger. I want them to go bankrupt and be acquired by a real telecom company. For the past six years they have been our only option for Internet service. Over that time we have improved from 800K to 3 Megs -- on a good day. On weeknights when everyone using our dead-end hub is at home and using their computers it's easier for me to mail large files to people than to try and upload them. I love living out in the country, but what I wouldn't give for a decent Internet connection.
“I believe Verizon started in the North East by combining Bell Atlantic and Nynex. It later bought GTE.”
True
Thanks for posting this. Although Verizon will continue to serve its customers from the masts, cell towers are expensive and increasingly problematic for it and other carriers. Consequently, towers are being supplemented by the deployment of access nodes that use small cell technology. These low powered devices are highly mobile, relatively inexpensive, and can be easily set up nearly anywhere for special events or in high density population areas to expand/improve coverage. It is well known that Verizon Wireless is deploying small cells as part of a “balanced approach” to network capacity so cashing out on its tower investments may make sense.
How much do they penalizes you breaking two years contract three months early???
Maneuvering in advance of the FCC Vote, their assets are at risk.
We decide to just wait out the end of our contract in March, not because we hate Verizon, their service cell phone service has always been good, but because I will never be tied to a contract again. When it's cheaper with a contract to add internet service you never use than just straight talk and text, there is something really wrong.
Continental Telephone came before—Gen Tel didn’t get here until the 80s. (There are still cable markers labelled CONTEL in my hometown)
I use Verizon wireless for my cell phones...
Oh my goodness...after having these crazy ideas rejected by the courts twice... Now, Obama ties an end around through the FCC and you say it’s technology? Have you lost you mind? My monthly check from Verizon will still be coming, but, it won’t be long until Obama grabs it, too.
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