The Bells are rushing to swap their backwater businesses and offshore assets for some waterfront properties on the urban gold coast.

A sweeping industry makeover is under way as the big old-line telephone companies put slow-growth rural facilities and international ventures on the block. In turn, they plan to use the cash they raise in those sales to push further into fast-growing areas such as wireless and data services.

BellSouth ( BLS) is selling Latin American wireless units. Meanwhile, SBC ( SBC) and Verizon ( VZ) are looking for buyers to relieve them of about one million customer access lines out in the boonies, with additional rural systems targeted for sale.

The strategy seems sound. Dumping cash-cow rural assets, in particular, to focus on a growth-boosting strategy clearly makes sense, analysts say. But the big telcos have yet to nail down a nagging detail: Who's going to buy all this stuff?

"I've never seen this many lines on the market," says Legg Mason rural telco analyst Mike Balhoff. "There are 6.25 million lines for sale right now. Before this, the most I had seen was two million in 2001."

For now, the trade-in trend clearly runs in the Bells' favor. The average rural line fetches slightly more than $3,000, Balhoff estimates. And judging by the $41 billion price tag on Cingular's purchase of AT&T Wireless ( AWE), the average cell-phone subscriber is worth just less than $2,000 each. By crude math, a telco can effectively swap two rural customers for three wireless subscribers.

But the glut of rural lines on the market easily could weaken prices. If so, that's not going to be good news for outfits like Verizon, which has earmarked more than 10% of its 60 million lines for future sale, say analysts.

BellSouth is the latest local phone giant to join the cash-out parade to help finance its U.S. wireless ambitions. The Atlanta phone giant said Thursday it was taking bids on its Latin American wireless holdings to help pay its 40% share of Cingular's AT&T Wireless acquisition. (BellSouth and SBC jointly own Cingular, the nation's No. 2 cell-phone service provider.)

Cingular partner SBC said earlier this month that it would like to sell about 600,000 customer access lines in rural Michigan and Texas. And rural telco Citizens ( CZN) is currently looking for a buyer for its stable of local access properties.

Last month, Verizon, the nation's largest phone company, put a for sale sign on its Hawaii assets, looking to sell as many as 700,000 customer lines. Verizon also wants to sell rural lines in upstate New York, where a torpid economy still languishes.

In BellSouth and SBC's case, any cash they raise is obviously targeted for paying down the AT&T Wireless bill. But Verizon fancies a big wireless prize of its own, namely the 45% stake in Verizon Wireless held by Vodafone ( VOD), say observers.

"Sooner or later, Verizon has to deal with Vodafone and the $20 billion-plus they will need to buy them out," says Balhoff.

Verizon has said that asset sales are all part of its ongoing deleveraging act, as the phone titan continues to chip away at its $45 billion debt pile. The company also has said it would be very interested in owning a full stake in its wireless business.

Selling rural lines and so-called nonstrategic assets has advantages, says Blaylock & Partners analyst Rick Black. Not only does it bring in needed cash to finance mergers, but it helps the Bells focus their resources where all the growth is. Black has a hold rating on all the Bells.

"The Bells are focusing on cities where they can concentrate their dollars in areas where they get the best return," says Black.

Meanwhile, investors have to hope the Bells are right in forsaking the country for the bright opportunities in the big cites.

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