Verizon CFO says data center sale 'progressing,' telco will make decision in next 3 months

Verizon's CFO said the company is making progress on the sale of its data centers, and expects to make a final decide whether it will sell the asset within the next three months.

Fran Shammo, Verizon


"We're progressing," said Verizon's Fran Shammo at the Bank of America Merrill Lynch 2016 Telecom & Media Conference today, when questioned about the sale of the company's data centers.

"Part of our slowdown was that a lot of the buyers want to see financial statements by data center. Obviously a company our size we don't keep financial records by data center, so we had to go back and put some financials together for the investors to see exactly by data center what the revenues and costs were," he said.

"We've worked through that, and so I would anticipate over the next three months we'll have more to report whether we'll move forward or we don't move forward," he concluded.

Shammo in January confirmed a Reuters report that the carrier was exploring a sale of its data center business, which the report said would be for $2.5 billion. One of the sources cited in a Reuters article said that Verizon's colocation assets include 48 data centers, which currently generate earnings of about $275 million.

Verizon has been shedding other assets recently too. The company last year sold many of its wireless towers to American Tower for $5.1 billion. And more recently Verizon concluded the sale of its wireline properties in three states -- California, Florida, and Texas -- to Frontier Communications for $10.5 billion.

Moreover, Verizon isn't the only telco to consider selling its data centers. CenturyLink executives have said the company is also mulling a possible sale of its data center business. And Windstream sold its data center business to TierPoint, a data center specialist, for $575 million last October.

Despite the sale process, Verizon appears to be continuing to invest in its data centers. The company recently took a next step forward in transitioning to NFV by completing an OpenStack cloud deployment across five of its data centers in the United States. After being launched in 2015, the NFV project created a production design based on a core and pod architecture that Verizon says provides the hyperscale capabilities and flexibility necessary to meet the service provider's network requirements.

To create the NFV OpenStack pod-based design for these sites, Verizon worked with Big Switch Networks, Dell and Red Hat. Through this collaboration, the service provider and its vendor partners were able to reach concept to deployment of more than 50 racks in five production data centers in less than nine months.

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