Verizon Dumping Landlines?
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UPDATED: Verizon is reportedly in discussions to sell up to 5 million phone lines in seven states.
The New York-based telecom is courting statewide divestiture of 1.6 million lines in Maine, New Hampshire and Vermont along with 3.4 million lines in Indiana, Illinois, Michigan and Ohio, according to The Wall Street Journal.
Verizon spokesman Robert Varettoni downplayed the reports, saying the company is frequently approached and continually evaluates assets.
The spokesman pointed to the $1.3 billion 2004 sale of Verizon lines in Hawaii and an ill-fated attempt to shed traditional phone lines in New York.
Ron Lataille, senior vice president of investor relations, told reporters on a webcast this morning that the company has been in discussions with various parties but that nothing is imminent.
"Our goal in the consumer space is to be more heavily weighted toward broadband," the executive told reporters.
While Verizon continues to lose traditional phone customers, Verizon Wireless showed 18 percent growth in the first quarter of this year.
According to Allen Nogee, analyst with In-Stat, wireline is on its way out.
"All these wireline service providers are preparing for it," he said. "It won't happen this year or next, but eventually wireline will go the way of dialup modems."
Although Lataille admitted buying out Verizon Wireless co-owner Vodafone "will be a smart, strategic goal," the Verizon executive tried to put the brakes on any talk the potential sale of phone lines would bankroll the buyout of Vodafone's 45 percent share in the jointly owned wireless provider.
"We don't need to do anything now," said Lataille. "There is no urgency to acquire their share at any cost."
The value of Vodafone's stake in Verizon Wireless reportedly is $40 million.
Asked if Verizon has had new talks with the European company, Varettoni refused to comment, saying only "the ball is in Vodafone's court."
"The reason why they may have difficulties to achieve an agreement is obviously price," said Thomas Huson of JupiterResearch.
The analyst confirmed reports a gap remains between Verizon's $38 million offer and Vodafone's $50 million asking price for its stake in the wireless unit.
Any deal could also include Verizon's stake in Vodafone Italy, the analyst said.
Vodafone recently told internetnews.com it plans to remain in the U.S., calling Verizon Wireless "a very successful partnership."