The telecom data center divestiture trend continued this week with the news that both CenturyLink and Verizon had completely the sale of data center assets to entities specializing in the data center business. Verizon sold 29 data centers to Equinix, while CenturyLink sold its portfolio of 57 data centers to investment funds advised by BC Partners in a consortium including Medina Capital Advisors and Longview Asset Management. As part of the deal, CenturyLink gets a 10% ownership in a new company formed by the consortium that will be known as Cyxtera and which will focus on “global secure infrastructure.”
It was only a few years ago that telecom service providers were amassing data center assets, eyeing opportunities to serve enterprise customers’ growing demand for cloud and colocation services. It was just six years ago that Verizon bought Terremark, citing “everything as a service” opportunities. But former Terremark assets — including NAP of the Americas, an important interconnection point between North and South America – are now part of the sale to Equinix.
Telecom Data Center Divestiture
Cincinnati Bell in 2012 was one of the first telecom service providers to divest its data centers, which it did through a spinoff. Another example is Windstream, which sold data centers in 2015 to data center operator TierPoint.
Telecom data center divestiture doesn’t mean telcos are getting out of offering cloud services, however. Virtually every sale has included a provision for the seller’s continued involvement with the assets – and this week’s deals are no exception. CenturyLink’s part ownership of Cyxtera helps ensure that. And Verizon will exclusively resell Equinix colocation and interconnection services globally, an Equinix press release notes.