The biggest wireless carrier in the United States (in terms of customer base) is reportedly selling some of its wireline assets in order to let go of the non-core parts of its business. As reported by the Wall Street Journal, Verizon Wireless is said to be close to sealing a deal that will see the carrier sell off parts of its wireline division and its cellular towers for a sum of $10 billion.
If this pushes through, it will allow Verizon Wireless to concentrate more on its wireless service, which is the core of its operations, being responsible for over 70 percent of its total revenues.
Additionally, by divesting itself of its non-essential business segments, Verizon Wireless will be putting itself in a better and more flexible position, especially financially. This can really be a big help to the Big Red, considering that it is still trying to get rid of some current debts plus the $10.4 billion in wireless licenses that it is supposed to pay as a result of the recent spectrum auction conducted by the Federal Communications Commission (FCC).
The Wall Street Journal report also mentioned that AT&T, Verizon's closest rival and incidentally the leading bidder in the spectrum auction, is also trying to attract interested parties for its data centers. Both Verizon and AT&T are in need of additional spectrum so that they can strengthen their existing wireless networks, and to ensure that video and music streaming services on their networks can be deployed more smoothly to their respective customers' mobile devices.
According to the Wall Street Journal story, the sale of some of Verizon's wireline assets will likely involve more than one deals with several different buyers starting later in the week. Because the carrier has been more or less hinting the asset sale for several months now, it should be able to attract interested parties.
Of course, this is not the first time that the Big Red has tried selling off some its business segments, especially those that are not part of its core business. In 2009 for instance, Verizon Wireless sold 4.5 million landlines to regional telecoms company Frontier Communications. Also, in 2006, the carrier got rid of its directories division.
As for the cell towers -- well, wireless carriers don't always require cell towers for their operations. For example, T-Mobile sold its cell towers to Crown Castle in 2009 for a sum of $2.4 billion. It is now common for wireless carriers to have other companies manage the cell towers, while they rent space for their own antennas.
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