Verizon Confirms It May Sell Its Data Centers

After months of dismissing news reports that the company may be considering selling its data centers as rumors, Verizon Communications CFO Francis Shammo finally confirmed that the reports were true.

Speaking with analysts during the company’s fourth quarter 2015 earnings call Thursday, Shammo said the company was exploring opportunities to sell the assets. “We will always look for opportunities,” he said. “The data centers is an exploratory exercise to see if the asset is more valuable inside or outside the portfolio.”

Last year, Verizon sold its wireless communications towers, switching from an ownership to a leasing model, and it views its data centers in a similar fashion. If it can sell its data centers in a way that will free up capital that can be used for higher-return investments, they will be sold.

“There is no decision that has been made,” Shammo said. “This is an exploratory, and as we explore, if the numbers come out like it did on towers, then we’ll execute on a transaction. If it doesn’t, then we won’t.”

Read more: Who May Buy Verizon's Data Centers?

Reuters reported last year that Verizon was mulling the sale of its data center assets, citing anonymous sources. The news agency also reported that the 48 data centers in question could be worth as much as $2.5 billion.

Verizon’s data center portfolio is a mixed bag that includes some of the most valuable data centers in the world as well as many smaller, older facilities that aren’t attractive for potential buyers. The most valuable assets are data centers it gained through the $1.4 billion acquisition of data center provider Terremark in 2011.

The question now becomes whether Verizon will be open to selling some of its data centers, or whether it will insist of offloading the entire portfolio at once. The latter scenario, while good for Verizon, will be difficult to realize. There are many data center providers that would find former Terremark assets, such as NAP of the Americas in Miami or NAP of the Capital Region in Culpeper, Virginia, attractive, but there aren't many that would want to own the whole portfolio.

Read more: Why CenturyLink Doesn't Want to Own Data Centers