Verizon Wireless To Buy Alltel For $28B

CWmike writes "Matt Hamblen reports that Verizon Wireless has officially announced an agreement to purchase Alltel for $28.1 billion, which would make the new company the largest wireless carrier in the U.S., with 80 million subscribers. The deal will undoubtedly provoke scrutiny by the Federal Communications Commission and the Department of Justice, they acknowledge. Who loses? 'This [deal] is another nail in the coffin for Sprint," said Michael Voellinger, an analyst at Telwares in Parsippany, N.J. 'Alltel is a highly valuable and strategic roaming partner to the top four providers, and this acquisition would put long-term pressure on pricing and terms of those arrangements.'"

Obligatory

[Skeet112 (1088203)]

1. Nails
2. Hammer
3. Coffin
4. Profit!!!

Re:

[cayenne8 (626475)]

This sucks.

I've always had Sprint as my cell provider since I got my first phone about 10 years ago. I've been happy with their service, phone plans, and coverage.

I keep hearing nothing but horror stories about other carriers.....

Re:Obligatory

[mapsjanhere (1130359)]

Yes, I'm one of the Alltel customers, I found out when I got a call from an unknown number, asking me
"Can you here me now?"

Re:Obligatory

[contrapunctus (907549)]

I had verizon. I hated the phone lockdown. So I switched to Midwest Wireless. They were awesome. They didn't mess with the phones. They were friendly. If you canceled or got a new phone they would prorate the cancellation penalty (If you sign a 2 year contract, and cancel after 1 year, you would only pay half the penalty, etc).
Alltel bought Midwest Wireless. I can't get google calendar notifications (until very recently) anymore. Not so friendly. I was pondering leaving Alltel.

It's full circle, if Verizon buys Alltel, I'm back with Verizon.

Fuck it. Time to get an iPhone.

Re:

[CrazedWalrus (901897)]

I had T-Mobile for my contractually mandated time. During that time, I couldn't even keep a call going in midtown Manhattan, let alone suburbia. I hated going to Verizon because I've had bad experiences with their billing people screwing things up, but I did it because I at least wanted the service I was paying for.

Well now I've got FiOS and Verizon Wireless and so far have been happy. My expectations of horrifically screwed-up billing never did come true, so I can say that right now, at this moment, I'm a

Consumers?

[HaloZero (610207)]

Could someone with a bit more enlightenment spell out what this means for subscribers, please?

Re:Consumers?

[robo_mojo (997193)]

Fewer choices and greater prices.

Re:

[Constantine XVI (880691)]

The good: Verizon will likely merge Alltel's network with their own (relatively easy, since they use the same tech), boosting coverage for subscribers on both networks
The bad: Verizon will definitely replace Alltel's stock firmwares on new phones with their own, locking out features and making them consumer-hostile.

Re:Consumers?

[mapsjanhere (1130359)]

I don't think so, my Alltel Razor talks to my desktop using usb, my office mate's identical Verizon model is locked up.

Can you say "Monopoly" ?

[unity100 (970058)]

say it. now spell it.

because this is it.

although im a capitalist, im increasingly starting to think that big corporations need a MAJOR whack on their butts so that competition can be a possibility again.

Re:

[cjb658 (1235986)]

although im a capitalist, im increasingly starting to think that big corporations need a MAJOR whack on their butts so that competition can be a possibility again.

And we all thought we were getting a good deal when the 700MHz spectrum was sold...

Re:

[bsDaemon (87307)]

I could, but that ATT and Sprint are still out there means that Verizon isn't a monopoly. Even if they are... When ATT was *THE* phone company, we didn't have any of those annoying pin-drop adds or John Stamos and his stupid 10-10-220, telemarketers calling to ask if we wanted to switch long distance services, etc.

I'm pretty happy with Verizon.

Re:

[LandDolphin (1202876)]

Yeah, you did not have as many annoying commercials, but you paid $5 a month to rent a home phone and $0.50 a min for a long distance phone call.

Re:Can you say "Monopoly" ?

[DragonWriter (970822)]

But can we at least have one of these conversations without people throwing around the "M" word like it applies to any and every situation involving a public corporation?

Yeah, its really annoying when people say "Monopoly" when the right term is "Oligopoly".

Even without Alltel being bought by Verizon, the four-firm concentration (combined marketshare of the top four firms) in the wireless market is over 80%.

What it certainly is not is a open, competitive market.

That Alone...

[Nom du Keyboard (633989)]

Alltel is a highly valuable and strategic roaming partner to the top four providers, and this acquisition would put long-term pressure on pricing and terms of those arrangements.

That alone should be more than sufficient to nix the deal. Anything that would upset the balance in the market this much should require more than stringent guarantees of access at current prices for the next century -- and not for the next 18 months as would be more likely proposed.

I love merger's

[Galactic Dominator (944134)]

In my area, there are two choices if you wish service outside the metro....Verizon and Alltel. I've been with Alltel for a couple of years and I switched from Verizon. I left Verizon for a reason, and I'm sure many of you know what that is. Poor customer service, billed for things I didn't have, etc, /etc. Alltel has had a few issues with my account, but at least they've resolved them when I call in.

Help me Obi-Wan Kenobi, you're my only hope!

Re:I love merger's

[Nom du Keyboard (633989)]

In my area, there are two choices if you wish service outside the metro....Verizon and Alltel.

With the reduction of providers competing for your business from 2 to 1, do not expect your rates to be going down any time soon.

Thank goodness

[Jor-Al (1298017)]

Does that mean now that the horrible Alltel commercials will finally end?

Re:

[Skeet112 (1088203)]

Yes, although having a personal wizard to summon at will would still be pretty damn sweet.

Re:

[SeaFox (739806)]

I hope they make one more with the Verizon guy riding the Alltel guy like a pony shouting "WHO'S MY BIATCH NOW?"

Re:

[dr_dank (472072)]

You cannot tell me that you don't enjoy summoning the wwwizzzzard for hours on end.

Of course, but at least I wash my hands afterward.

Monopoly 2.0

[TheLazySci-FiAuthor (1089561)]

What even defines a monopoly anymore?

Shouldn't there be some cap on the ratio of providence of a service or product to demand or something?

Obviously 80 million wireless subscribers is approaching a significant portion of the US population. And let's do the numbers on AT&T.

double-u tea eff question mark exclamation point.

Re:No, that is a dictionary definition

[drhamad (868567)]

That's a dictionary definition. That is NOT a US antitrust law (or anyone elses antitrust law) definition. A monopoly market exists when one firm (or a small number of firms) have the ability to raise prices above the [competitive] market level. That alone is not an antitrust violation though. You also need to have them actually do something which is detrimental to the marketplace (predatory pricing, pricing below cost, etc).

Re:

[Manchot (847225)]

Not true. There are many places where only one of those options is available, in which case there is a local monopoly. Not that it matters anyway, since a two-company oligopoly will be just as bad. AT&T and Verizon won't merge: they know that with the highly probable changing of the guard at the Justice Department this year, they'd be broken up instantly. No, what's far more likely is that unspoken collusion will occur, and they'll independently decide to stay off each other's turf. In a very real sense

Re:

[indiejade (850391)]

This is true. However, it is an oligopoly in which collusion and cartels are more likely. And this means the FCC still has pull.

Verizon probably won't win the early termination fees [zentu.net] suit if it goes to the US Supreme Court, and it knows that, so it's doing the next most predatory thing it can.

The article in the OP stated: "The companies noted that Alltel is serving 57 mostly rural markets that Verizon Wireless does not serve." In other words, Verizon is buying out the rural markets, giving those people l

I Hope...

[dougmwne (958276)]

I hope this isn't the final nail in Sprint's coffin. I happen to be very attached to my $30/month everything unlimited SERO plan.

obviously this isn't illegal

[thermian (1267986)]

We should therefore stop arguing, and accept that theirs is the superior intellect, after all, what could possibly go wrong?

My Condolences

[bogie (31020)]

Welcome to turdville. Population? You. You'll be happy to learn that at least you'll have the best coverage available. Oh and hurray for taking one more giant step towards a single company owning everything.

SPLIT

[llZENll (545605)]

Just for trying this crap they should split Verizon in twain. Veri gets the even phone numbers, and Izon gets the odd ones. Ready... Set... Compete!

First of many

[afidel (530433)]

As many market watchers have pointed out the weaken US economy combined with a likely end to the lazafaire practices of the Bush administration means there are likely to be a fairly large number of mergers started in Q2 and Q3 so that they can get past regulators before a new government is in place.

Great, no more stupid commercials

[nurb432 (527695)]

We can say good by to those stupid commercials now.

Other then that, having a even larger company with more control over their customers so they can screw them more is all i see coming out of this.. Good thing i dont use a cell phone, or believe in them.

Alltel commercials

[wowbagger (69688)]

<humor>
I wonder what effect this will have on the Alltel commercials: The Verizon kid is the nastiest, most obnoxious of the lot.
</humor>

Customer backlash?

[jyunderwood (1016191)]

No doubt the Alltel customers who are use to My Circle and relatively un-crippled phones compared to Verizon will not like this.

Would customers be able to get out of their contacts when they merge?

Not sure if this is good for me or not

[GweeDo (127172)]

As a very happy Alltel customer I am not sure what to think of this. While being part of a larger provider does offer more features and phones and what not, Alltel is crazy liberal with what they let you do with your phone. Basically if the MFG supports it, GO FOR IT! Verizon on the other hand is the exact opposite. If you don't pay for their branded apps (other than hacking) you don't get it.

Well, that was fun....

[Delecron (1012817)]

Verizon now has a network that no one will be able to touch for years. Even if ATT bought everyone else it wouldn't have such dominate coverage (That's after getting the technology integrated). In the end ATT will never be able to catch up. Verizon and Alltel are both on the same path to LTE, will have little to no technology integration issues and will save billions in operating and roaming costs. Between their acquisition of MCI, FIOS TV and Internet and now this dominating wireless coverage they pretty much own any kind of retail data you could want to purchase. Wimax is going to be relegated as the last huge failure by Sprint as they fade into the background. Only thing to do is sit back and wait for the commercial where the VZW guy stretches his hand out to Chad and says "Your not such a bad guy". As Chad cracks a tear and puts his hand out the VZW guy rips it off and beats him to death with it.

Some Insight: rural areas and future access

[vinn (4370)]

I learned something interesting today.

However, before we get to that, let me just say I think this is a good thing. I've managed several large cell accounts (500+ handsets) and I've had great experiences with Verizon - their business side is great. At least the reps I've dealt with. Conversely, the company I work for now has Alltel and I think they f*cking suck. For reference though, AT&T is the worst company I've ever deal with (500+ account). Then again, I've never dealt with Sprint. This is probably a regional thing, YMMV.

Anyway, our rep had some interesting news today. Now, Alltel services some VERY rural areas including this remote area of Montana that I live in. According to her, Alltel in Montana will never be operated as Verizon, it is impossible due to FCC regulation. After the sale is complete, Verizon will have to divest our market and any others acquired in which there was direct competition (A & B side carrier designation).... to yet another carrier. This will be a good chunk of real estate so the expectation is that it will be to another major player.

So what does that mean? Verizon is going to suck up a lot of urban areas and urban customers and rural customers are likely to get shafted. Shafted meaning they will be transferred to odd little local carriers (yes - they still exist), such as Chinook. Why? Because Sprint still hasn't built out their PCS network in lots of rural areas. AT&T's GSM still has poor coverage in many areas too compared to Verizon & Alltel's older CDMA technology. Also, rural areas are very expensive to install infrastructure in, especially if you're dealing with mountains.

My recommendation for anyone maintaining a large cell account: stop buy equipment and renewing contracts. This deal will likely take 6 months for acquisition, and then a year for assimilation. That means, get your existing contracts as close to expiration as you can so that you're not incurring costs to break your contract. Right now breaking an Alltel contract is approximately $175 /line.

Re:

[Constantine XVI (880691)]

Even though T-Mobile doesn't have the greatest penetration in the US, they are (AFAIK) turning a profit, and have even bigger corporate backing from DT in Germany. That same backing also (hopefully) reduces the chances of a buyout.

Sprint, unfortunately, has neither of those advantages.

Re:

[ivan256 (17499)]

Sprint does, however, have the cheapest wireless data plans in the US. I guess we can kiss those goodbye soon.

I guess I can hope the FCC says "no" to this deal...

Re:

[Constantine XVI (880691)]

Actually, T-Mobile has the cheapest. According to Sprint's site, a data plan is $30 a month. I pay T-Mobile $20 for my BIS* package. Granted, it's EDGE, but it's fast enough (usually ~300kb/s, tops out around 500), and tethering is free. However, Sprint's $99/mo pure unlimited does beat out T-Mobile's (which doesn't include data).

*BlackBerry Internet Service

Re:

[PopeRatzo (965947)]

Yeah, "great" is right.

Lord knows we've already got too much competition in the telecom space, right?

Pretty soon we'll have two airlines, two telecoms, two oil companies, two pharmas and two entertainment conglomerates. Oh, and two companies that own all the newspapers, TV networks, etc and those will be two of the companies from the list above. Two companies that make airplanes in the US (or is it down to one now?). Two banks, of course, and they will also be the only two brokerages.

What the fuck is our

Re:

[ColdWetDog (752185)]

What the fuck is our justice department doing? Have any of them heard of anti-trust?

We've got two political parties.

Both of them money from the two telecoms, two oil companies, two pharmas, two entertainment conglomerates and the two "news" companies.

What do you think?

Oh, and the two airline companies are too busy losing too much money to do much of anything else.

Re:Great...Ordering of Priorities

[DigDuality (918867)]

and if you give up your freedom for safety/security, then you're protecting nothing.

Re:yeah.. but..

[Constantine XVI (880691)]

Nextel == iDEN phones & network, running nothing of note
Sprint == CDMA phones & network, running J2ME
Result: disaster

Verizon == CDMA phones & network, running BREW
Alltel == CDMA phones and network, running BREW
Result: probably much better

Re:yeah.. but..

[0100010001010011 (652467)]

Running nothing of Note? Nextel IS the phone of large companies.

NexTel started out as fleet dispatch frequencies and moved into the cell phone range. NexTel has always been an excellent niche between 2 way radios and full blown cell phones.

Our factories have numerous repeaters in them so that we have full coverage in the building. Push to Talk is used constantly. It seems to be the same for all other friends of mine that work in the manufacturing world. AT&T, Verizon are great for upper management and executives but anyone that might get grease on their hands uses a NexTel

J2ME, BREW is all junk for our work. Most of our phones show 4 lines of black on green. They'll all survive a drop from a second story building, being plunged under water and being left in dash in the sun. The batteries also last twice as long as any 'consumer' cell phone I've used.

NexTel definitely has something to bring to the table.
-
While I've never used them AllTel has seemed to drive a bit of competition. First they had the "5 friends" thing then it seems everyone had that. Now they're up to "Any friend on any network" which other people seem to be copying.

Re:yeah.. but..

[oahazmatt (868057)]

Verizon locks down everything, Alltel is freedom. This is bad for Alltell customers in that respect!

Yes, Verizon locks down quite a bit. I have to use BitPim just to do some file transfers.

However, having a $22 Billion debt is not good for Alltel customers, either. They may have "America's largest network" but they don't exactly have America's largest customer base, (The article I read this morning had them at about 15% and 20% of the Verizon and AT&T customer base, respectively) and in order to continue providing to its customers, the company needs some relief.

Is this a good thing? Maybe. I'd like to think the two networks will operate under a large umbrella and Verizon and Alltel might remain as independent as possible, just provide a more complete network coverage.

Is this a bad thing? Maybe. Alltel customers may be turned off if sudden phone lockdowns come out of this.

Guess we'll just have to wait and see.

Re:Come and get your love! FOOLISH

[Nom du Keyboard (633989)]

I'm VZ for work and home. My girlfriend is Alltel. Now I don't have to worry about not being in her circle!

You're foolish enough to think that a VZ and AT merger will benefit you as gaining the feature set of VZ + AT = both of you.

Expect more likely, both of you = - (VZ + AT).

Re:Come and get your love!

[truthsearch (249536)]

My girlfriend is Alltel.

Dude, your girlfriend's worth $28 billion? That's pretty sweet.

Re:

[Jor-Al (1298017)]

Now I don't have to worry about not being in her circle!

That's because her new boyfriend was instead.

Re:

[maxume (22995)]

Alltel is CDMA.

Re:appeals process

[drhamad (868567)]

To appeal the FCC decision they'd have to go to the courts. Since the FCC is an administrative agency, the courts will basically look only at whether or not the FCC's decision was arbitrary/capricious. That's a pretty tough standard.

By the way, one of the main reasons XM/Sirius was likely approved was because they both lose craptons (that's the technical term) of money. If the choice is zero providers of a service, or one, we prefer taking the one. The other reason it can/has/will be approved is that