Doug on IP Comm – An independent voice on VoIP, telecom, and IP Communication

Verizon unloads wireline operations in 14 states to Frontier

Posted on: May 13, 2009

Verizon is selling off its wireline operations in predominantly rural areas across 14 states to Frontier.  Ba-be, we can hear you now…

The transaction is expected to return around $8.6 billion to Verizon and its shareholders as Verizon continues to “transform its growth profile” (i.e. shed parts of its business that aren’t making money so fast) and focus on wireless, FiOS, and global IP networks. As CEO Ivan Seidenberg pointed out in Verizon’s press release, ” All of Verizon’s remaining local landline operations have high concentrations of FiOS in more densely populated markets.  We believe our focus on reshaping our asset base will drive higher growth over time and improve long-term returns.”

As a part of the deal, the company is transferring over around 110,000 FiOS Internet customers and 69,000 FiOS TV customers, so it will be interesting to see how the numbers are juggled for FiOS growth moving forward.  Assets transferring over to Frontier include Verizon’s switched and special access lines in the affected areas, as well as its Internet service and long-distance voice accounts.  Also included are fiber-to-the-premises (FTTP) assets (i.e. FiOS) deployed by Verizon in 41 local franchises and the state of Indiana, which pass approximately 600,000 homes and small businesses.  Frontier will continue to provide video services in these areas after the completion of the merger.

NOT included in the deal are anything involving Verizon Wireless, Verizon Business, Verizon Federal or anything that says Business in the title.  Verizon Business will purchase local services from Frontier in order to serve existing customers.

Approximately 11,000 Verizon company employees  are being transferred over and are expected to continue to be with Frontier after the merger.  Verizon is touting Frontier as a reliable partner (gotta sell the deal to the shareholders, since they’re getting Frontier stock) that has successfully acquired, operated, and invested rural telecom propers, including landline assets purchased from Verizon between ’93 and 2000.  Operations Frontier is getting from Verizon include all of Verizon’s local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin annnnd a small number of Verizon’s exchanges in California, including those bordering Arizona, Nevada and Oregon.

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