UPDATE: Verizon CTO blasts reports of possible sale of enterprise assets
Verizon CTO Fran Shammo, in comments made today during the 2015 Wells Fargo Securities Technology, Media and Telecom Conference, called reports that Verizon was considering a sale of its enterprise assets “factless. These are the same reporters and bankers who keep saying we’re going to buy Dish,” Shammo said. “There’s no foundation behind these comments.”
“These rumors and speculation are really ridiculous,” Shammo said.
Editors note: RCR Wireless News initially ran the below report, based on a Reuters exclusive, and prior to the comments reported above.
Citing unnamed sources familiar with the matter, Reuters reported Nov. 6 that Verizon Communications is considering a dump of its enterprise assets, including wireline and data center holdings, that could be worth $10 billion.
According to the report, the possible sale would include MCI, an enterprise wireline and Internet service provider, and data center unit Terremark.
Jim Patterson, RCR Wireless News contributor and CEO of the Patterson Advisory Group, explores this issue in-depth in his latest column, available here.
Patterson drew a parallel with other recent industry moves: “This [from Verizon] comes on the heels of CenturyLink’s disclosure earlier in the week they will likely sell off most of the Savvis data center assets, and Windstream’s sale of their data center assets to St. Louis-based TierPoint.
“How could something that was so valuable and strategic in 2011 turn into an albatross four years later?” Patterson asks. “Was the ‘everything-as-a-service‘ strategy that promised secure yet speedy connections a failure? What are the implications of this to FiOS (residential and business fiber services in the Northeast) and to their main wireless competitor, AT&T?”
Reuters reports that CitiGroup is advising Verizon Communications on the possible sale and, according to the media outlet’s sources, “Verizon’s enterprise assets might not be easy to separate and any potential buyer would likely have to sign commercial agreements with the company, some of the people said. Verizon is still considering how some of these asset sales could best be structured and no deal is imminent.”
Verizon Communications closed on the MCI deal in 2006 and used many of MCI’s assets to create its Verizon Business enterprise unit, which unveiled an integrated wireline/wireless offering that includes wireless broadband access from its Verizon Wireless subsidiary. The collection of Enterprise Mobility products are based on MCI’s remote access suite, and Verizon Business also is seeking to leverage Verizon Wireless’ CDMA2000 1x EV-DO network by touting wireless broadband as a secure mobile backup for times when companies’ primary networks are disrupted. Other products included managed services, data and IP networking, Voice over IP and IT services.
