Tom Paine
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The value the market places on Verizon's (
(NYSE: VZ) non-wireless business (essentially, what is considered the landline business) has been difficult to determine. But perhaps its recent agreement to buy out Vodafone's stake in Verizon Wireless provides some clues. Then again, perhaps not.
The Vodafone deal values Verizon Wireless at about $290 billion. By that measure, Verizon's 55% stake would then presumably be valued at $159.5 billion.
The market cap for Verizon (which includes its Verizon Wireless stake) is about $134 billion. Acording to Capital IQ, Verizon's enterprise value, a measure that typically equates to market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents, is $184.1 billion.
Verizon's non-wireless assets include its advanced fiber FiOS footprint, its legacy copper telephone footprint, and a strong enterprise business, which includes its Terramark enterprise cloud business acquired in 2011.
At times, there has been speculation that the landline business could be spun off. Another, perhaps more likely, alternative would be an increased use of the wireless network to supplement, and in some cases replace the copper network using 4G LTE. The single ownership of the two businesses should make a more integrated approach to managing them possible. Broadband Reports' Karl Bode does suggest that
Verizon may consider selling (or dumping) some non-core area, copper-based networks, as it did previously to Frontier and Fairpoint.
There has been considerable debate as to whether Verizon's FiOS investment, which has been somewhere in the $20 billion range, has paid off.
