Telecom Italia Wants Out of the Data Center Business

Telecom Italia may be the next telco to get rid of its data center business.

Its management has been talking about spinning the colocation business off and listing it on a public exchange, Reuters reported, citing an anonymous source close to the matter.

In recent years, getting rid of these valuable but expensive to manage assets has been a popular way among big telcos to get more cash and sharpen focus on their core connectivity businesses. Most of these companies are busy building out 5G infrastructure and new-generation virtual network services. Leasing space, procuring power, and upgrading facilities is not at the top of their to-do lists.

Verizon, AT&T, CenturyLink, Telstra, KPN, and Telefonica have all recently sold or spun off most or all of their data center assets. The most recent deal was announced just last week, when Equinix said it had agreed to take three data centers off Axtel’s hands in Mexico for $175 million. (Bloomberg broke the news that the deal was imminent the day before the announcement.)

It’s a seller’s market for data center owners, especially owners of data centers where companies connect to global networks – the kind telcos usually own. Specialist data center operators like Equinix and Digital Realty Trust have demonstrated willingness to pay high multiples for the right kind of assets.