Verizon’s Data Centers On the Market? Carrier Could Seek $2.5 Billion in Sale
Verizon Communications reportedly put a total of 48 data centers up for sale this week, launching an auction process that could reap the No. 1 U.S. wireless carrier in excess of $2.5 billion in a sale. According to Reuters, the reported move by Verizon would almost certainly indicate that, going forward, the company intends to focus on other core business models.
In 2011, Verizon made a major play in the space when it acquired Terremark Worldwide, a key operator, for $1.4 billion. The present sale package of 48 data centers includes those facilities as well.
Potential buyers for the assets did not immediately present themselves, but as Data Center Knowledge (DCK) assesses the scenario, certain players are likely to show interest in Verizon’s news. High up on DCK’s list — though not commenting in the report — is Equinix. As the largest global collocation and interconnection company, taking the package of data centers off Verizon’s hands would be a bull’s-eye for Equinix in terms of its established central business strategies.
The sale also opens the landscape to competitors in the collocation and interconnectivity space looking to expand. Operators hungry to make a play for new global dominance may see strategic and operational value in bidding on the 48-installation offering. Interested parties could well include Digital Realty Trust, CoreSite and CyrusOne, though none of these allegedly interested parties commented in the DCK report.
The implications of a Verizon sale, in terms of what telcos are up to in the data center ecosystem, could suggest a change of corporate strategy as well. Originally thought to be an avenue to new revenue, the ongoing cost of expanding and upgrading data centers may well be too great a long-term expense for entities such as Verizon. Other telcos, however, such as NTT Communications and Shaw, are still buying and investing in data centers.
The newly reported development is not the first time Verizon has explored off-loading components of its business portfolio. In 2015, as Reuters reports, Verizon explored selling enterprise components, including its MCI assets, which the company acquired in 2006 and rebranded as its Enterprise Solutions division. Despite reported discussions with CenturyLink, the process did not result in a sale last year.