Partner: Frontier Acquisition Of Verizon Wireline Assets Could Impact Small-Business Sales
Frontier Communications received final approvals last week that would allow the provider to acquire telecom giant Verizon's wireline business in the nation's three largest states for $10.54 billion.
The acquisition consists of Verizon's TV, landline phone and broadband units, along with the provider's fiber-based Fios network in California, Texas, and Florida. These Verizon assets serve about 3.7 million voice customers, 1.2 million video customers and 2.2 million broadband connections, according to Verizon.
Frontier won the approvals of the California Public Utilities Commission (CPUC), the Federal Communications Commission (FCC), the U.S. Department of Justice and the Public Utility Commission of Texas. The transaction is expected to close at the end of March 2016.
The overall selloff is mainly focused on Fios, Verizon's small business and consumer offering. Verizon still has a national network and will continue to have resources in the three states for mid-market and enterprise customers, said Michael Wolfington, vice president of West partner sales for Kingcom, a Portland, Ore.-based national Verizon platinum partner.
Kingcom exclusively sells Verizon products and services to consumers, as well as to SMB and enterprise customers through partnerships with VARs and managed service providers. Fios sales in California, Texas and Florida account for about 15 percent of Kingcom's small business and consumer sales, Wolfington said.
"For us, it only impacts our small business sales to some degree -- that will sting a little bit, but it won't be a huge impact because we also serve the Northeast and we'll shift most of our focus up there," he said.
Frontier is acquiring 10,000 employees from Verizon and plans to work with Verizon's existing channel partners moving forward, said Steven Crosby, senior vice president of government regulatory affairs for Frontier. Also, rates for customers won't change, he said.
"The idea is as little impact as possible during the transition to Frontier from Verizon," Crosby said.
Verizon’s decision to sell its wireline assets could be an indication that the company is trying to build up its cash position to repay debts and meet future investment commitments. The carrier also wants to focus on expanding its Fios broadband footprint on the East Coast, according to Wall Street analysts with Zacks Investment Research.
The sale will allow Verizon to concentrate its landline operations in contiguous East Coast markets, "enhancing the efficiency of its marketing, sales and service operations across our remaining landline footprint," a Verizon spokesperson said in an email to CRN.
Kingcom's Wolfington believes Verizon is trying to be more strategic from a network perspective. "I know their commitment to the channel has increased and will continue to increase going forward. I don't think this is anything the channel has to be concerned about," he said.
However, if partners want to sell DSL and Fios to customers in the three states included in the acquisition, they'll have to partner with Frontier. But partners can still sell Verizon's other business services -- such as MPLS and voice services -- in those states, Wolfington said.
"Nothing will change there. We expect that our partner production in those states in medium and enterprise business sales will be business as usual," he said.
PUBLISHED DEC. 8, 2015