Verizon Communications' sale of its landline operations in Hawaii for $1.65 billion to the Carlyle Group is the look of things to come, as Verizon and the other remaining former Regional Bell Operating Companies (RBOCs) are expected to accelerate the unloading of some of landlines to fund investment in wireless and fiber.
"This reflects the intense competition," said Kevin Mitchell, of Infonetics Research, in an interview Monday. "The RBOCs are seeing a loss in the number of fixed-access lines every quarter." Mitchell noted that Verizon is keeping its Hawaiian wireless operations, which is considered to be growing.
Verizon said the transaction with Carlyle involves about 707,000 wirelines and some additional related services. Each line is valued at about $2300.
In a statement, Carlyle managing director William Kennard said: "We will offer new services to our customers, including expanded broadband, and we expect to add many new jobs after the acquisition." With Kennard, a former FCC chairman at the helm, Carlyle has been rapidly adding telecommunications investments to its portfolio.
Verizon has been selling some of its existing landline operations--particularly in rural regions--as it focuses on developing more advanced technology in its remaining divisions. Its Verizon Wireless unit is building out a nationwide high-speed wireless network, called BroadbandAccess, and last week it began deploying its fiber-to-the-premises (FTTP) technology. FTTP connects fiber-optical lines directly to subscribers' homes, replacing copper-wire links.