Even the Carriers Are Dropping Their Landlines for Wireless
By Eric Lin, Mon May 24 21:00:00 GMT 2004

Verizon is selling off its landline business in Hawai'i, concentrating on wireless and fiber development instead. This isn't a unique case either.


Verizon Wireless started life as one of the regional carriers that resulted from the breakup of AT&T as the landline monopoly in the US. Like other regional landline operators here, they launched a wireless service, which has grown to a nationwide footprint. Verizon is now moving away from their original business, selling off landline properties in less populated area to fund their wireless and fiber investments.

Before they lose too much value, Verizon is selling off its Hawaiian landlines to the Carlyle Group for $1.65 billion, or about $2300 each. This is already down from the value of about $3000 less than a year ago. As more people scrap their landlines in favor of wireless phones and broadband internet from alternative providers like cable companies, the value of landlines is diminished and operators will have increasing trouble making money.

The Hawai'i sale is not a unique case; Verizon is also trying to sell off landlines in Upstate New York as well. SBC, another RBOC who is majority owner of Cingular wireless, is trying to liquidate landline properties in Texas and Michigan. They could use the money to line coffers after they finish the buyout of AT&T Wireless.

In addition to Cingular's expansion efforts, SBC has been adding co-branded cable, satellite and other media to their portfolio to offer subscribers one-stop shopping in efforts to create more value per customer. Verizon is instead regrouping, re-inventing their services. Instead of adding traditional services, they are launching new efforts. One of which is Fiber to the Premises - a home installation of a fiber connection for high speed net access. (We're drooling.) Despite the huge bandwidth of this new network and Verizon's wireless service, CEO Denny Strigl said they have no intention of wholesaling bandwidth off to MVNOs.