Verizon Communications CFO Fran Shammo has dismissed rumours that his company is considering selling its enterprise wireline assets, describing them as “ridiculous”.
Verizon Communications (NYSE:VZ) CFO Fran Shammo has dismissed rumours that his company is considering selling its enterprise wireline assets, describing them as “ridiculous”.
Speaking at a Wells Fargo conference in New York, Shammo said the enterprise assets remain core.
Reuters had cited people familiar saying Verizon could raise up to US$10bn from a potential sale of assets including the former MCI business, which provides landline and internet services to large enterprises, and data centre unit Terremark. The report stated that the carrier had hired Citigroup to advise it on the potential move but was still looking at how it might be structured.
Shammo described the rumours as “factless”, “speculative”, “with no foundation” and “ridiculous”, adding that he had no comment beyond that.
Following its recent agreements to sell wireline assets to Frontier Communications for US$10.5bn and to offload towers to American Tower in a US$5bn sale and leaseback deal, rumours have persisted that Verizon would seek to divest more wireline assets so it can focus on its core business.
No dish on Dish spectrum
Shammo also denied that Verizon is interested in buying the US$3.5bn worth of AWS-3 spectrum which affiliates of Charlie Ergen’s Dish Network recently decided to surrender after the FCC decided they didn’t qualify for small business discounts.
The CFO said that if he had wanted more spectrum, he would have bought it at the auction, adding that the company had decided licences for airwaves in New York and Chicago were too expensive.
“Why would I now go out and buy spectrum and be held hostage by a third party?” he asked. “Charlie has good spectrum but he paid too much for it. I’m not interested in Dish.”
However, he conceded that he would look at the surrendered spectrum if it re-auctioned.
Shammo also said Verizon will not make a final decision on whether to participate in next year’s 600MHz spectrum auction until it is clear which airwaves will be made available and what the auction rules will be. The broadcasters currently holding the licences are in the process of deciding whether to take part in the ‘reverse’ part of the auction, which will see them sell airwaves to the FCC. These will then be auctioned to carriers.
Shammo noted that 600MHz spectrum is good for capacity but not coverage and has interference issues with the 700MHz airwaves it currently holds. As such, he said the 600Mz spectrum would be more costly to deploy and is therefore not a priority.
“It would be nice to have but it’s not essential,” he added.
Shammo said Verizon plans to take advantage of technologies such as small cell to densify its network and boost capacity.
