RSSHanging up now: Verizon backs out of landline business in 14 states
By Tim Conneally | Published May 13, 2009, 12:25 PM
In a deal valued at $8.6 billion, Verizon Communications has agreed to sell its wireline assets in Indiana, Michigan, Nevada, Wisconsin, North Carolina, Ohio, Oregon, South Carolina, Arizona, Idaho, Illinois, Washington, West Virginia and parts of California to Connecticut-based Frontier Communications.
Verizon will spin off its assets into an independent business called New Communications Holdings Inc. (creatively called "SpinCo") which will then merge with Frontier's existing model in approximately one year's time. Frontier will earn 4.8 million lines and incur $3.3 billion in debt.
According to the company, this transaction turns Frontier into "the largest 'pure' rural provider of voice, broadband, and video services with more than 7 million access lines in 27 states." Less than one percent of Frontier's coverage footprint will be urban areas, and the majority will be areas with 37 households per square mile. It will enjoy the greatest expansion in the Great Lakes area and Pacific Northwest.
"This transaction is part of our multi-year effort to transform our growth profile and asset base to focus on wireless, broadband, and global IP," said Verizon CEO and Chairman Ivan Seidenberg, "Frontier knows how to run wireline communications services well and has a top-notch management team to take these properties to the next level."
They could have just called the spin off GTE or General Telephone since that's what a lot of it was prior to their acquisition.
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|Verizon seems to be unaware of who its current customers are and the services they have. I just received a phone call that essentially resold me the services I already have at a "discounted" price. The right hand, it appears, doesn't know what the left is doing.
By-the-by, I live in Illinois.
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|Holy Toledo! (Which, presumably, will now be served by Frontier). The big red joke finally comes clean about its hugely under-served markets. Here's hoping Frontier will do what Verizon never would - bring some decent service to the just-beyond-city-limits areas of the US. As I write this the weather outside is gorgeous, and my power is off again (average is 15 minutes every other day). My Verizon phone sounds like an AM radio during an electrical storm as always. I have an interstate within pellet gun range and I'm 10 minutes from a municipality that has cable and DSL. People don't understand how lax these utilities are with their infrastructure outside of incorporated areas. Frontier stands to make a fortune if they think creatively and commit to bringing folks like me into the 20th century technologically. Yes, I said 20th - I would be overjoyed with cable internet from 1999.
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|1998 called, the year wants to know why you refuse to move for decent broadband. The year is also introspective, and wonders what other questions it can ask of people.
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