T-Mobile Sells Data Center and Wireline Business to Cogent for $1

Cogent Communications Holdings has acquired T-Mobile’s wireline business for $1 billion. In addition, T-Mobile expects to have a pre-tax charge of $1 billion from selling the unit to Cogent. T-Mobile will also pay Cogent $350m in the first 1 year of closing the deal and another $350m over the next 42 months after the first 12 months. The fee is for Cogent’s IP transit services.

The deal also includes a handover of over 40 data centers spanning 37,160 square meters (400,000 square feet) of space to Cogent. Upon closing the deal, Cogent’s total data center count will increase to 100+ from the initial 53. Its total data center space will also increase to over 92,900 square meters (1,000,000 square feet).

The CEO of Cogent Communications, David Schaeffer, said: “There is 1.3 million square feet of owned data centers spread across 47 physical locations with about 150MW of power, he said during the Bank of America Media, Communications and Entertainment Conference last week. “We will integrate that into the 53 data centers that Cogent operates and have well over 1 million square feet of colocation space available at Edge locations throughout North America and couple that with our European footprint.”

He continued by saying: “Now the bad news is there are a bunch of stranded costs associated with this business. This is a business that has operated for a number of years, subscale, has a number of uneconomic commitments. We will be able to physically consolidate locations typically into the owned facilities, reducing lease costs for Cogent.”