Verizon to sell wireline assets, towers for $15.5bn

Verizon announced the sale Thursday of landline operations in three states and some 160 wireless towers for $15.54 billion, as part of a shift in focus by the telecom giant (AFP Photo/Paul J. Richards)

New York (AFP)Verizon announced the sale Thursday of landline operations in three states and some 160 wireless towers for $15.54 billion, as part of a shift in focus by the telecom giant.

Verizon Communications Inc agreed to sell its wireline operations serving customers in California, Florida and Texas to Frontier Communications Corp in a $10.54 billion deal.

 At the same time, the major US telecom announced it would lease more than 11,300 of its wireless towers to American Tower Corp, which will also buy about 165 towers in a $5 billion transaction.

Verizon also unveiled a $5 billion share-repurchase program. The accelerated program is in addition to a three-year repurchase program announced in March 2014.

"These transactions will further strengthen Verizon's focus on extending our industry leadership position in our core markets and return significant value to our shareholders," said Lowell McAdam, Verizon's chairman and chief executive, in a statement after the market closed.

Shares in Dow member Verizon were up 1.0 percent at $48.35 in after-hours trade on the New York Stock Exchange.

Verizon's wireline operations in the three states include FiOS Internet and Video services and served about 3.7 million voice connections at the end of 2014. They do not include the New York-based company's wireless assets.

The sale to Frontier is aimed at putting a sharper focus on penetrating the East Coast market with its FiOS fiber-optic digital voice, TV and Internet network across a "contiguous footprint" in the region, the New York-based Verizon said.

Verizon will retain wireline operations in nine states and Washington, DC, which, by end-2014, served 16.1 million voice connections.

The companies expect to complete the transaction in the first half of 2016.

Frontier purchased landline assets from Verizon in 2009 and 2010. It currently has access lines in 28 states, providing an array of voice, broadband and video services.

In the wireless tower deal, American Tower will lease and operate over 11,300 Verizon towers, with an average 28-year lease term and Verizon subleasing capacity on the towers. Verizon said it anticipated the transaction would close in mid-2015.

Source: Yahoo Finance.