Verizon sells Latin America wireless assets

Verizon Communications this week became the latest major U.S. carrier to sell off its wireless assets in Latin America. The company announced definitive agreements to sell its Caribbean and Latin American telecommunications operations in three separate transactions with a total value of $3.7 billion to Latin America mobile carrier América Móvil, and a company owned jointly by Teléfonos de México and América Móvil.

Both Latin America firms are controlled by communications magnate Carlos Slim Helu, who has been referred to in published reports as the third-richest man in the world, and who also holds investments in several other telecom industry firms. The Verizon sell-off follows a move by Cingular Wireless in late 2005 to sell all of its holdings in the Caribbean to regional service provider Digicel.

The interests being sold by Verizon include stakes in service providers in the Dominican Republic, Puerto Rico and Venezuela. Verizon owns 100% of Verizon Dominicana, a 52% interest in Telecomunicaciones de Puerto Rico Inc. (Puerto Rico Telephone) and a 28.5% interest in Compañia Anónima Nacional Teléfonos de Venezuela (CANTV).

Verizon Chairman and CEO Ivan Seidenberg said in a statement, "For Verizon, these transactions are a natural step in the evolution of our growth and shareholder value creation strategies. Over the years, our investments in the Caribbean and Latin America have been a source of solid financial performance, but today they represent a small part of our revenue base that is less aligned with our core business focus and future growth. While these transactions deliver value to Verizon shareholders and improve our financial flexibility, we are also providing for the control of the three companies by well-regarded, highly qualified operators with significant operations in the region."

The three properties serve a combined total of more than 15 million wireless, wireline and broadband customers in the three countries and have approximately 17,000 employees.

América Móvil has agreed to purchase Verizon’s interest in Verizon Dominicana and the stake in Puerto Rico Telephone. An entity jointly owned by América Móvil and Telmex has agreed to purchase Verizon’s indirect interest in CANTV. According to a statement from Verizon, each transaction is subject to separate regulatory approvals in the various jurisdictions. Each proposed sale is a separate transaction, and none of the sales is contingent on the closing of any of the other transactions.