Verizon to Raise $10 Million to Fund AWS-3 Wireless Licences

by Istvan Fekete on February 3, 2015

Verizon Communications Inc. is about to close a deal to sell roughly $15 billion in assets, according to sources familiar with the matter speaking with the Wall Street Journal.

The deal could involve the sale of multiple cell towers and parts of its wireline business to multiple parties as soon as this week, the same sources said. Actually, Verizon has a very good reason to unload these assets: It has a hefty $10.4 billion bill to pay for the wireless licences it won during the AWS-3 spectrum auction that closed last week.

Another noteworthy factor in the company’s unloading of assets is that Verizon took on massive debt to buy out Vodafone Group’s 45% stake in the company – that bill was $130 billion.

Now, the company has multiple assets it can sell. It has traditional wireline operations offering phone, Internet, and television services that brought $38.4 billion to the table last year, accounting for almost a third of the company’s total revenue. “There are certain assets on the wireline side that we think would be better off in somebody else’s hands so we can focus our energy in a little bit more narrow geography,” chief executive Lowell McAdam said in January.

Also, a JP Morgan analyst recently mentioned that if Verizon decides to sell some of its towers, it could bring in $5 billion.

The country’s biggest carrier was second only to AT&T in amount spent at the AWS-3 spectrum auction. AT&T outbid all other players for two main reasons: to help replenish spectrum forfeited as part of the failed T-Mobile acquisition and because of “the limited strategic alternatives”, particularly with Dish, given the pending acquisition of DirecTV.

On the other hand, Verizon has spent $10.4 billion improving the uniformity of its portfolio and now has two top-20 markets with less than a 100 MHz position, a Jefferies analyst commented.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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