Wednesday, June 4, 2008

Verizon Buys Alltel

Verizon made it official in a release on 6/5/08. It was originally reported by CNBC on 6/4 at 2:25pm EDT, that Verizon Wireless is in discussion to buy Alltel. Also reported on Reuters, Verizon will offer a slightly higher price the current owners paid, $28 Billion. Most of us think that Alltel's current owners overpaid for the network. After less than a year of ownership, getting out for almost the same price, instead of a big loss, would be lucky. Patience, and leveraged value, have been among Verizon's greatest virtues. Yesterday Verizon's stock price dropped, today it is jumping up.

We'll be saddened to see this happen. There goes a major competitor, and what about other considerations like what will happen to Alltel's GSM? That may be the best reason to buy Alltel. Losing Alltel GSM roaming will leave a HUGE hole in AT&T's coverage. T-Mobile might suffer as well. Yikes! Of course, Verizon might want to keep that GSM roaming money coming in. Dare we hope? AT&T would need to pay handsomely for some of those markets, even if they are required to be spun off. Would they? Could they?

Of course there would be savings in roaming charges, and there should be areas that need to be spun off, but we're wondering if there is another story behind the story, beside the GSM conflict? Oh well, we saw this coming...

See Verizon, Alltel and Combination maps.

4 comments:

Anonymous said...

One has to wonder how long Verizon will continue to allow roaming on their network by AT&T as well as Sprint. They will be in such a dominant position after this merger that they can say no to allowing Sprint users to roam on the Verizon network. Why would they allow their two biggest rivals access to their network?Shutting off Sprint's access would really expose the difference in the two networks. As it is now, with the present roaming agreements they have in place with Verizon, Alltel, and USCC, Sprint users (of which I am one) get the best of everything. I have a retention plan that includes free roaming. The price and coverage is unrivaled. Should Verizon turn off this roaming access I would likely have to switch to Verizon.
Of course the FTC and FCC might have something to say about this.

Ian said...

Though I think that we're good until everyone's contract expires, as if I remember correctly the Sprint\Alltel\VZW (yes VZW has a roaming agreement with Sprint) roaming agreements, of which the Sprint\Alltel one is near-transparent and reciprocal, have a few more years to go. Se we're safe...for now.

Also I actually have found little reason to roam n Verizon, or even Alltel; either Sprint coverage is strong where I am, I'm roaming on a local carrier that has the only 850 MHz CDMA in the area, or I have no service at all. I've roamed on calls maybe 15 minutes over the length of my contract, and I'm maybe 9 months in now.

Nonetheless, things aren't looking rosy for Sprint roaming once mega-Verizon comes to call. This is much, much bigger than the Dobson CellularOne acquisition that AT&T did last year...

rod said...

Interesting enough that since the buyout was announced last week my Sprint Moto Q9C data connection while roaming on Alltel no longer works. I have called Sprint and they say it should work while roaming, but who knows. Or could it be that I just updated to Microsoft 6.1?

Bill Radio said...

For the foreseeable, all Alltel agreements remain intact, some of which extend into 2012. So, Ron, I'm certain you are running into other issues with your phone. Alltel can't even think of changing anything that might mess up the deal with regulators. Both carriers need to play "by the rule's" now more than ever. There are so many "what if's" to look at, and I agree, Sprint's roaming agreements are among those with great potential. But any changes are quite a ways down the road.