Verizon's Shammo: We'll make a decision on our data center business in Q3

data center racks

Verizon (NYSE: VZ) says it's closer to finalizing what it is going to do with its data center business, one that it has struggled to maintain in recent years as it faces greater competition from data center specialists like Equinix.

Speaking to investors during the telco's second quarter earnings call, Fran Shammo, CFO of Verizon, said it would make a decision in the third quarter about the future of the business.

"On the data center sales we are coming to an end of the process," Shammo said. "And we will probably come to a definitive answer in the third quarter as to whether we're going to move forward or we're not."

In January, Shammo 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 formally entered the data center business when it purchased the Terremark data center business in 2011 with the aim of expanding its "everything as a service" vision and data center capabilities both domestically and internationally.  

Shedding assets has been an ongoing trend for Verizon as it looks to sharpen its geographic focus on the Northeast and growing its wireless and FiOS business lines.

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

Verizon is hardly alone in its desire to exit the data center business.

Fellow telco CenturyLink has told investors the telco is mulling a possible sale and other options for its data center business. Meanwhile, Windstream sold its data center business to TierPoint, a data center specialist, for $575 million last October.

In the near-term, Verizon continues 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. Since the program was 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.

For more:
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