Report: Verizon wireline assets sale could make strategic sense

A new Goldman Sachs report theorizes that if Verizon (NYSE: VZ) sold off its consumer wireline assets it would pave a smoother way toward merging its wireless operations with those of its partner Vodafone (LSE:  VOD.L).

"The remaining wireless and enterprise businesses (of Verizon) would have faster growth and a clear fit with Vodafone's assets and strategy, making it a more attractive merger partner," said Goldman Sachs analyst Tim Boddy.

Over the past year, Verizon and Vodafone have been working more closely together with a particular emphasis on global enterprise customers. However, as reported in FierceWirelessEurope, Verizon CEO Lowell McAdam said in September not to expect a merger in the near term.

If history is an indicator, the idea of Verizon selling off its remaining wireline assets isn't all that far-fetched. The service provider entered a somewhat unprecedented relationship with three of the largest cable operators in December to not only purchase spectrum, but sell each other's services.

"Given that it no longer faces the threat of integrated cable competitors, Verizon could potentially spin off its remaining Consumer Wireline assets," along with "large" pension and benefit liabilities, Boddy said in the report.  

Besides its new agreement with the cable operators, Verizon has been busy selling off a large chunk of its wireline assets, mainly in its secondary and rural markets.

Notable deals include the sale of its New England wireline assets to FairPoint (Nasdaq: FRP) and its operations in 14 rural states to Frontier Communications (NYSE: FTR).

For more:
- Bloomberg has this article

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