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US service providers spin off assets as the core business shifts

London - 17 February 2015

AT&T, Verizon, Windstream and MegaPath all share asset divestments in their recent history, shedding non-core assets through outright sales or moving them to OpEx. Brian Washburn, Service Director at Current Analysis, comments on the long-term consequences in a new post on the Current Analysis Blog.

Earlier in February, Verizon reached agreements for two major sales: a roughly $10.5 billion divestment of former incumbent local GTE telephone properties, and a $5 billion long-term lease, manage and purchase arrangement with American Tower for its 11,300 wireless towers. AT&T completed a similarly structured wireless tower long-term lease agreement with Crown Castle in 2013.

Brian Washburn, Director of Global Business Network and IT Services at Current Analysis, says:

“When it comes to asset restructuring, there’s more going on. Some US service providers formed holding companies, and many US data centre operators converted to real estate investment trusts (REITs) because of their more favourable tax status.”

“The math might differ from one case to the next. But the divestments suggest operators are coming under the same pressures that enterprises have been grappling with over the last several years. Service providers are trying to decide what sunk assets are critical for the business to own outright, and what non-critical assets they can offload.”

To read the full blog post, please visit Current Analysis' IT Connection Blog.

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AT&T urban skyscraper in Los Angeles, United States.

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