Equinix/Verizon Data Centers Part of Carrier's 'Connectivity' Plan That Could See More M&A, Analyst Says
Verizon's planned sale of 24 data center sites to Equinix for $3.6 billion is part of the carrier's "three-pronged strategy for connectivity, platforms, and solutions" that could include additional mergers and acquisitions, Macquarie Capital's Amy Yong wrote investors. "Replenishing its…
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cash keeps it on track to reach pre-Vodafone leverage and leaves dry powder for eventual M&A, which we believe could involve Dish" Network, said the analyst. Dish's 80 MHz "could bolster Verizon’s capacity, allowing it to offer unlimited data plans without straining its network," Yong emailed Tuesday evening, after the Equinix/Verizon transaction was disclosed (see 1612060036). Verizon retains 27 other data centers, including a few in Canada and the U.S. and the rest in Europe and Asia-Pacific, a telco spokeswoman said Wednesday. With Stage 3 of the FCC broadcast incentive auction ended after one round and Verizon's down payment in the auction appearing lower than rivals, if the auction is unsuccessful, Dish spectrum could be more valuable, Yong said. Dish declined to comment on the report and Verizon didn't comment. "AT&T’s push into mobile video vis-à-vis DirecTV Now/the pending Time Warner deal could push Verizon to explore more aggressive options. Sling TV could be Verizon’s 'DirecTV Now,' or a way to gain additional scale in mobile video," Yong said: "Similar to AT&T-DirecTV, Sling TV could be offered under zero-rating conditions enhancing its Freebee data offering and as a retention tool" for subscribers.