Equinix to buy BCE’s data centers for $750M | Light Reading

01 Jun Equinix to buy BCE’s data centers for $750M | Light Reading

Another telecom operator is getting out of the data center business. This time it’s Canada’s BCE, which announced it will sell 13 sites to data center giant Equinix for $750 million (C$1 billion).

The sites, spanning 25 BCE data center facilities, are expected to generate roughly $105 million (C$150 million) in annualized revenue by the fourth quarter. Equinix said it would add the 600 customers included with the deal to its global network of operations stretching across 210 data centers in 55 metro areas.

“Our partnership with Equinix will further accelerate digital transformation opportunities for Canadian enterprise customers, combining access to Equinix’s interconnected global data centre platform with Bell’s advanced broadband network connections, wide range of cloud solutions and experienced professional services team,” Tom Little, president of BCE’s Bell Business Markets, said in an Equinix release.

The transaction isn’t a surprise. Light Reading reported last month that the Wall Street analysts at Cowen believed Equinix’s recent $1.25 billion public offering was intended to raise money for the BCE data center purchase.

A BCE sale of its data centers to Equinix also has precedent. For example, Verizon sold around 29 data centers in 24 sites to Equinix in 2016 for $3.6 billion. Separately, AT&T sold its own data center colocation operations and assets to Brookfield for $1.1 billion in 2019.

However, this trend doesn’t necessarily signal the end of telecom’s interest in data centers and cloud computing. For example, Verizon, AT&T and other big telecom operators have begun working in the edge computing space: Verizon inked an edge computing partnership with Amazon late last year, while AT&T has been working with Microsoft in its growing Azure edge computing operation.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano