Verizon could be looking to sell out of the enterprise market, if reports emerging on Monday prove to be accurate.
The U.S. operator is considering selling enterprise assets that could be worth as much as US$10 billion, Reuters reported, citing unnamed sources.
The assets in question include its fixed-line and Internet services business that used to be known as MCI and data centre unit Terremark, the sources said, adding that the telco has struggled to keep pace with advances in cloud computing and faces significant price pressure in the business services space.
Verizon acquired long-distance telecoms provider MCI a decade ago and created its Verizon Business unit to serve the large corporate customers it gained through that deal, as well as its existing business and government customers. It added Terremark to its portfolio in 2011.
A sale is not exp ected in the immediate future, since it will not be easy to separate out Verizon’s enterprise assets, the newswire’s sources said. Verizon is still working out how the asset sales could be structured, they added.
It has reportedly hired Citigroup to advise it on the sale.
The sources also said that Verizon held talks with business services provider CenturyLink about the sale of its enterprise assets earlier this year but the pair were unable to agree on terms.
Since then, CenturyLink has begun mulling asset sales of its own, announcing last week that it is exploring alternatives for its data centre operations, which include 59 data centres in the U.S., Asia and Europe.
"The review process will involve a full range of options, including but not limited to a partnership or a joint venture, a sale of all or a portion of the data centres, as well as potentially keeping these assets and operations as part of CenturyLink’s portfolio," CEO Glen Post said on the firm’s third quarter earnings call.
"We believe we have the right strategy in combining our network service offerings with the delivery of managed IT and cloud-based services, and our enterprise customers are responding well to our managed services offerings," Post said. "We expect colocation services will continue to be a service our customers will look for us for, but we do not necessarily believe we have to own the data centre assets to be effective in delivery of those services."
