Vezion Sells Thousands of Base Stations, Bringing in $3 Billion in Revenue

According to Bloomberg’s report this week, Verizon Communications is considering selling 5000 to 6000 mobile network base stations, which could bring in over $3 billion in revenue. However, an analyst believes that the so-called acquisition price is “too cheap” based on the value of recent base station sales.

Bloomberg pointed out that Verizon has hired consultants to gauge potential buyer interest and speculate that it may attract interest from infrastructure companies and strategic buyers. But the report acknowledges that exploration is preliminary and may not lead to sales.

The report did not provide specific reasons for Verizon’s development in this direction, but pointed out that Verizon’s sale of leasing and operating rights for approximately 11000 base stations to Towner in the United States for an initial price of $5 billion in 2015 was to help Verizon raise funds, provide funding for spectrum acquisition, and reduce debt.

Verizon has not yet commented on the report, but New Street Research has stated that based on past sales data from AT&T and Verizon, the average selling price per base station is $530000, and the price range of $500000 to $600000 per base station is too low.

Philip Burnett, an analyst at New Street Research, pointed out in an article about the report that Shentel sold 219 base stations last year, and PG&E sold 700 base stations in 2021, with an average value of $1.4 million per base station. Burnett pointed out, “We believe this is Verizon’s bottom line for selling base stations today.”

Burnett explained, ‘Based on recent transactions and market comparisons, we estimate that the selling price of these assets may be close to three times the rumored transaction value’ – possibly between $7.7 billion and $9.1 billion.

But he admitted that it should be noted that the tenants of these Verzion base stations are unknown, and he pointed out that a base station usually has two to three tenants. If Verzion is the sole tenant of each base station, which is highly unlikely, then the rumored value of the sale exploration is fair.

Due to the slowdown in network operator spending and some difficulties in the base station market, rumors of Verizon exploring the sale of base stations have surfaced. However, some analysts are hoping for a rebound from base station operators such as SBA Communications, Crown Castle, American Tower, and DigitalBridge. These assets are still valuable as they are increasingly being used to support the deployment of a wider range of digital infrastructure and artificial intelligence applications.