Report: Verizon to sell $10B in wireline assets to Frontier

Verizon (NYSE: VZ) is close to reaching a deal to sell $10 billion in wireline assets to Frontier Communications, reports Reuters, citing a person familiar with the talks.

News of a potential deal follows reports that Verizon would sell a package of assets, including its wireless towers and elements of its wireline business for about $15 billion.

There also was a rumor circulating that Verizon would sell its fiber networks in Florida, Texas and California, but that particular package was valued at only $5 billion.

Although neither service provider has specified any details of a deal, Verizon could use the proceeds to fund its recent $10.4 billion purchase of AWS-3 wireless spectrum in the FCC's Auction 97.

Frontier has been expanding its territory through targeted acquisitions over the past five years.

This would not be the only time Frontier and Verizon have conducted a wireline deal. In 2009, Verizon sold off its unwanted rural wireline assets in 14 states to Frontier for $6.8 billion. Later, Frontier purchased AT&T's Connecticut wireline operations for $2 billion last October.

However compelling a potential sale could be for Frontier in terms of scaling the geographic reach of its business, Macquarie Research said in a report that it is concerned about the quality of the assets it would buying.

"We are surprised that FTR's Board would approve such a big, binary bet on declining assets with cable competition set to strengthen with pending Comcast and Charter deals," wrote Macquarie in a research report.

Verizon would not provide a comment to Reuters and Frontier did not respond to FierceTelecom.

News of a potential wireline asset sale emerged in January when Verizon's CEO Lowell McAdam told investors during the Citi 2015 Global Internet, Media & Telecommunications Conference that "there are certain assets on the wireline side that we think would be better off in somebody else's hands so we can focus our energy in a little bit more narrow geography."

In related news, AT&T (NYSE: T) is also close to selling off $2 billion of its data center assets, but no particular deal has been struck yet.  

For more:
- Reuters has this article
- WSJ has this article

Editor's Corner: Verizon's desire to sell parts of its wireline network could kick off new consolidation trend

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