Verizon on Thursday said it has sold wireline assets in California, Texas and Florida to Frontier Communications in a deal valued at $10.54 billion and leased rights to wireless towers to American Tower Corp. for about $5 billion.
In a statement, Verizon said the deals will hone its focus and allow it to buy back $5 billion of its shares.
The move highlights how Verizon is increasingly betting on wireless and high-margin wireline businesses such as FiOS and enterprise connections.
As for the Frontier deal, Verizon said it will concentrate on the East Coast. By selling its operations in California, Florida and Texas, Verizon can better build out FiOS on the east coast. Frontier has service in 28 states and previously acquired Verizon wireline assets.
About 11,000 Verizon workers will continue to be employed by Frontier. The deal is expected to close in the first half of 2016 and covers 3.7 million voice connections, 2.2 million data customers with the bulk of subscribing to FiOS Internet and video.
Verizon said it will focus on wireline service in Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and Washington, D.C.
On the American Tower deal, Verizon sold the rights to 11,300 cell towers and 165 towers outright. The leases go for 28 years and Verizon will sublease capacity for $1,900 a month with 2 percent rent increases. The American Tower deal will close in mid-2015.