Verizon has started to consider a sale of business services and data storage assets. One of the largest U.S. wireless carriers, Verizon seeks to focus on its core business.
The assets, worth around $10 billion, which include the business formerly known as MCI, provides landline as well as internet services for many customers. Recently, the business has struggled to keep up with the advances in the cloud computing sphere and has faced fierce competition with its peers such as Alphabet Inc. and Amazon.com Inc.
It might not be easy to separate Verizon’s enterprise assets and any potential buyer would need to be willing to sign commercial agreements with the company. Verizon is still planning how these assets should be structured. Earlier this year, Century Link was talking terms with Verizon to buy some of its assets but was unable to agree on the terms. In a strategic shift, Century Link lately announced it would explore a few options for some of its data centers and sell them accordingly.
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Citigroup Inc. is hitched up with Verizon and has constantly advising the company on the sales of its assets that have estimated annual earnings before taxes, interest, depreciation and amortization of around $2 billion. Both the companies remained mum as the matter is considered to be confidential.
In recent years, the enterprise telecommunication company sought to adopt corporate customers which are searching for more advanced and cheaper offerings to manage their data. AT&T has been analyzing the sale of its data center assets for some time, while Windstream Holdings Inc. sold all its data center business for $575 million to TierPoint last month. During the company’s third-quarter earnings call held on Oct. 20, Verizon’s Chief Financial Officer Fran Shammo announced that it continues “to work through secular and economic challenges” with its global enterprise division, which posted a 4.9 percent decline in revenue in the quarter ended Sept. 30.