AT&T to sell some data centers for $2B, report says

AT&T (NYSE: T) is continuing its wireline asset sale roll with plans to sell some of its data centers in a deal that could fetch $2 billion, reports Reuters, citing people close to the talks.

Like its ILEC brother Verizon (NYSE: VZ), AT&T has been looking at ways to pay down debt for various investments it made in recent months such as its acquisitions of Iusacell and the $18.2 billion purchase of AWS-3 spectrum.

According to a Wall Street Journal report, Verizon is close to completing sales of its wireless towers and wireline assets in specific states worth $15 billion.

AT&T would not comment to Reuters about any potential sales.

A sale of its data centers would follow an ongoing trend AT&T began in late 2013 when it reached a deal to sell its Connecticut wireline assets to Frontier for $2 billion as a way to raise funds for network upgrades.

One potential suitor for AT&T's data center assets could be CenturyLink (NYSE: CTL), which has been expanding its data center and cloud services footprint through a series of organic builds and targeted acquisitions such as Cognilytics and DataGardens, two deals that gave it expanded analytics and disaster recovery capabilities.

In addition to bolstering its cloud services portfolio, CenturyLink has been aggressively expanding its domestic and international data center footprint. During 2014, the service provider completed the buildout of data centers in four markets, including Minneapolis, Toronto, Phoenix and Hong Kong. It also completed expansions of existing facilities in Chicago and Irvine, Calif.

Macquarie Securities wrote in a report that CenturyLink is a good candidate for AT&T's data center assets, but would not be interested in purchasing Verizon's lines in Tier 2 and Tier 3 markets.

"We feel that CTL would be a logical purchaser of AT&T's reported $2bln data center sale but that it is unlikely, in our view, that CTL has interest in rural access lines, especially ones not upgraded for fiber," according to the Macquarie Securities report.   

For more:
- Reuters has this article

Related articles:
AT&T's U-verse gains help to ease legacy losses in Q3
Report: Verizon could sell wireline assets as part of $15B sale
Verizon's McAdam: Some wireline assets would be better off in someone else's hands
Frontier wraps its acquisition of AT&T's Connecticut network assets

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