Verizon's Shammo says comments about enterprise business are baseless

Rumors about the sale of Verizon's (NYSE: VZ) remaining wireline and enterprise assets have emerged in recent days, but CFO Fran Shammo maintains that it plans to hold onto the assets.

Speaking to investors during the Wells Fargo Securities 2015 Technology, Media & Telecom Conference, Shammo said that it will continue to support the enterprise business and the reports are not based in fact.

"They are factless, baseless and there's no foundation behind these comments," Shammo said. "The question I wonder is are competitors trying to get the enterprise customer a little antsy about their continued support, but I think we have shown that enterprise is part of our portfolio and we'll continue to support our enterprise customers."

Shammo added that "these rumors and speculative information is ridiculous and there's no comment to make beyond that."

On Friday, a report in Reuters citing people close to the company said that Verizon is considering a sale of its enterprise assets, which could fetch the telco as much as $10 billion.

These assets would include its enterprise unit formerly known as MCI, which Verizon acquired in January 2006, and its Terremark data center business.

Verizon's Enterprise business has been wading through a challenging revenue environment, a trend that continued into the third-quarter. During that period, the service provider said a series of secular and economic challenges has created struggles in its Global Enterprise and Wholesale units as third-quarter revenues declined 4.9 and 5.8 percent to $3.21 billion and $1.46 billion, respectively.

However, Shammo said as it continues to make the Enterprise unit more efficient by consolidating billing systems Verizon is seeing some signs of revenue stabilization.

 "You're starting to see a little sign of monthly stabilization here from a revenue perspective," Shammo said. "My hope is that it will last longer than a blip on the radar screen, but we're starting to see where IP is starting to stabilize so maybe there is upside into 2017."

Similar to how FiOS and broadband revenues have continued to offset POTS declines, Verizon is seeing strategic services like cloud and Ethernet offset losses in the enterprise unit.

As it looks to grow its enterprise services business, Verizon plans to maintain its focus on pursuing organic growth opportunities such as the expansion of its NAP for the Capital Region, the telco's Culpeper, Va., data center.

"On cloud we have continued to invest several hundred million dollars a year on new data centers," Shammo said. "We just completed a pod down in Culpeper and there's still demand for cloud services data center space so we'll go after that but it will be organic growth not inorganic."

For more:
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Related articles:
Report: Verizon mulls $10B sale of enterprise business
Verizon likely won't sell wireline assets, says analyst firm
Verizon's Shammo: We'll have FiOS coverage in 70 percent of our East Coast footprint
Verizon remains unwilling to bring FiOS to Boston despite city's permitting, regulations concessions

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