U.S. telco exploring Digital Life options, more sales could follow to mitigate Time Warner impact.

AT&T is reportedly considering offloading its home security business in a bid to pay down debt, it emerged last week, and with the U.S. operator groaning under a debt burden in excess of US$140 billion, a series of divestitures could be on the cards.

The telco is exploring its options for the Digital Life business, one of which is a possible sale, unnamed sources told Reuters.

The unit, launched as recently as 2013, has between 400,000 and half a million customers, and could raise close to $1 billion, the sources said.

They pointed out that such a sum would make little impact on AT&T’s debt, which stood at $143.7 billion at the end of June, but noted that any Digital Life sale could mark the start of a series of asset sales as the telco prepares for its pending acquisition of Time Warner.

AT&T agreed to pay $85.4 billion for Time Warner in October last year. The deal is awaiting the green light from the U.S. Department of Justice (DoJ), but AT&T expects it to close by the end of the year.

Presuming it goes ahead, the acquisition will have a hefty impact on AT&T’s debt mountain, and the telco will have to take measures to mitigate this if it is to maintain its credit rating.

Reuters quoted MoffettNathanson analyst Craig Moffett as saying that such an increase in debt would be a "risky proposition" for a company with declining revenues.

AT&T posted operating revenues of $39.84 billion in Q2, down slightly from $40.52 billion in the year-earlier period.

"[AT&T] will almost certainly have to find assets to sell to appease the bond rating agencies," Moffett said.

The telco itself did not comment on the report.