Verizon Communications Inc. on Thursday said it is considering shedding millions of access lines that may not be performing well due to the competitive environment and regulations.
“There are some states where frankly we are just not growing the way we should. We are not generating the cash the way we should. Some of it is the competitive environment, but a lot of it might have to do with the regulatory environment,” Verizon Chairman Lawrence Babbio told analysts in New York who discussed the company’s third-quarter results. “So we might in fact either divest a part or all of a certain state where we don’t see the right regulatory environment and the right cash.”
In the third quarter, Verizon posted revenue of $18.2 billion, up 6.7 percent from the period a year ago.
Verizon, which had 53.7 million switched access lines at the end of the quarter, is seeking to divert more resources to such growth areas as wireless and high-speed Internet services. The company said for the first time its wireless unit contributed more than 40 percent of total revenue. Revenue at Verizon Wireless grew 23 percent to $7.3 billion in the third quarter, compared with $5.9 billion in the period a year ago.
Babbio said Verizon’s total access lines could drop to 40 million, The Wall Street Journal reported.
“It’s clearly not our intention to say we’re going to divest a third,” Babbio said. “But at 55 million, could we be better off at 45 or 40 and take the money generated from those [lines]? … We are still looking at this and we want to hold all of our options open.”
