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Businesses Communications The Almighty Buck Wireless Networking

Verizon Wireless To Buy Alltel For $28B 207

Posted by timothy from the all-your-base-stations-that-is dept.
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.'"
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Verizon Wireless To Buy Alltel For $28B More

Verizon Wireless To Buy Alltel For $28B

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  • Obligatory (Score:5, Funny)

    by Skeet112 ( 1088203 ) on Thursday June 05, 2008 @04:02PM (#23674171)
    1. Nails
    2. Hammer
    3. Coffin
    4. Profit!!!

    • Re: (Score:3, Informative)

      by 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: (Score:2)

        by blair1q ( 305137 )
        On the other hand, Sprint has always had the worst coverage anywhere I've used it.

        Last time I tried it, I had it for about 2 weeks. 75% of my calls were dropped, and 100% of calls when I was driving. And there were constant dropouts in the conversations.

        I got T-mobile and was happy with it. A year later, I sold my Sprint phone to a friend and he signed up with Sprint. He was okay with the service, but when I called him I recognized the dropouts and dropped calls. I warned him before, and I kept pointin

        • Re: (Score:3, Interesting)

          by 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

          • Re: (Score:2)

            by RevMike ( 632002 )

            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 happy customer. I make no claims or prognostications concerning next week.

            I've been using Verizon for a while. In terms of coverage, speed, and service reliability they really can't be beat. This merger makes a lot of sense because Verizon and Alltel run compatible systems but their markets don't overlap a lot. In this way one company can offer nationwide service on their own network. I expect the market to consolidate into two players over the next few years. The costs of enhancing the infrastructure are so high that, like many quasi-utilities, it doesn't make sense to hav

        • Last time I tried it, I had it for about 2 weeks. 75% of my calls were dropped, and 100% of calls when I was driving.

          Good. Maybe you should thank them.
  • Could someone with a bit more enlightenment spell out what this means for subscribers, please?

    • Re:Consumers? (Score:5, Insightful)

      by robo_mojo ( 997193 ) on Thursday June 05, 2008 @04:10PM (#23674325)
      Fewer choices and greater prices.
      • I signed a two year contract with Alltel in April of 2006, and find that I use my phone for text messaging 99% of the time. $55 a month (2 phones @ $110/mo, actually) is wayyy too much to pay for text messaging.

        I'm going back to cheapo Tracfones when my contract is up; that is, if they still have the phones that only charge you units for sending and not for receiving texts.

    • Re: (Score:3, Insightful)

      by 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.
      • Until recently, most phones lacked over-the-air firmware upgrade capability.

        Verizon aren't going to force an upgrade on 80 million customers -- at least not in the near future. They're stupid, but not that stupid.

        Besides.... the networks are compatible. There's really not much "transition" to take place at all. I wouldn't be surprised if the two networks were completely merged within a few months of the deal being finalized.
        • Re-read my first post:

          replace Alltel's stock firmwares on new phones

        • Until recently, most phones lacked over-the-air firmware upgrade capability.
          True but generally the phone manufacturers don't exactly spend a ton of effort on firmware upgrades either. They'd rather you just bought a new phone.

  • Can you say "Monopoly" ? (Score:5, Insightful)

    by unity100 ( 970058 ) on Thursday June 05, 2008 @04:03PM (#23674205) Homepage Journal
    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: (Score:3)

      by 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: (Score:2)

      by 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: (Score:2, Insightful)

        by 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.

    • now spell it.

      I'll go one better.

      mo-nop-o-ly
      1. exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.
      2. an exclusive privilege to carry on a business, traffic, or service, granted by a government.
      3. the exclusive possession or control of something.

      Notice a trend here? I think AT&T (27% market share) and SprintNextel (23% market share) and T-Mobile (11% market share) might have something to say about that whole exclusive bit.

      I realize

      • Re:Can you say "Monopoly" ? (Score:5, Insightful)

        by DragonWriter ( 970822 ) on Thursday June 05, 2008 @06:16PM (#23676033)

        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.
      • there is no difference in practice, before all those oligopoly corporations belong to the same good old boys group, who act together.

  • That Alone... (Score:4, Insightful)

    by Nom du Keyboard ( 633989 ) on Thursday June 05, 2008 @04:06PM (#23674231)

    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 (Score:3, Interesting)

    by Galactic Dominator ( 944134 ) on Thursday June 05, 2008 @04:07PM (#23674257)
    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!

  • Thank goodness (Score:5, Funny)

    by Jor-Al ( 1298017 ) on Thursday June 05, 2008 @04:07PM (#23674271)
    Does that mean now that the horrible Alltel commercials will finally end?

    • Re: (Score:2, Funny)

      by Skeet112 ( 1088203 )
      Yes, although having a personal wizard to summon at will would still be pretty damn sweet.

    • Re: (Score:3, Funny)

      by 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?"
  • 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.
    • Mono -- one. As long as Verizon and At&t don't merge, there's a choice. As long as there's a choice, it's not a monopoly.
      • 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: (Score:3, Insightful)

        by 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: (Score:3, Insightful)

        by 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... (Score:2, Interesting)

    by 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 (Score:3, Funny)

    by thermian ( 1267986 ) on Thursday June 05, 2008 @04:13PM (#23674383)
    We should therefore stop arguing, and accept that theirs is the superior intellect, after all, what could possibly go wrong?

    • Re: (Score:2)

      by Akardam ( 186995 )
      ... and accept that theirs is the superior intellect ...
      Oh man, no bueno! Last time somebody said something like that it was stilted speeches and OMG that's his real chest all the way to the Mutara nebula!
  • 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.
  • 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 (Score:5, Interesting)

    by afidel ( 530433 ) on Thursday June 05, 2008 @04:19PM (#23674469)
    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.
    • Mod parent up.

      Consolidation during periods of lax regulation and other useful negligence will continue. So will the price of gas/fuel.

      Watch Revol merge with T-Mobile, Virgin Mobile, and produced RevolTing Virgin Mobile.

    • Re: (Score:2)

      by glwtta ( 532858 )
      the lazafaire practices

      You can't be serious.
  • 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.

    • Re: (Score:2, Funny)

      by lmnfrs ( 829146 )
      We may be able to say goodbye to "those" commercials, but do you really think they won't be replaced? From now on expect only 3 dorks in a van. They'll be looking for their red-shirted friend only to discover that he's hanging out with his network, and that said network is now partially comprised of wizards.

  • Alltel commercials (Score:3, Insightful)

    by wowbagger ( 69688 ) on Thursday June 05, 2008 @04:27PM (#23674605) Homepage Journal
    <humor>
    I wonder what effect this will have on the Alltel commercials: The Verizon kid is the nastiest, most obnoxious of the lot.
    </humor>
    • My guess? The Verizon kid will obviously distract Chad, while "The Network" just swarms him from behind and burns down his store.

      Network Guy: "Say it!"
      Chad: *whimper*
      Network Guy: "Say it! [bleep]ing say it!"
      Chad: *sniff* "Can--- can you hear me--- now?"
      Network Guy: "[bleep] yeah."
  • I can use my cell phone on top of Halfdome cause that would be pretty nice.
  • From an email discussion earlier:

    So in the Alltel commercials, does the Verizon tech lookalike now get to noogie "Chad," and make him drive the "Wizard" van?

  • Customer backlash? (Score:5, Insightful)

    by jyunderwood ( 1016191 ) on Thursday June 05, 2008 @04:37PM (#23674749)
    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 (Score:4, Interesting)

    by GweeDo ( 127172 ) on Thursday June 05, 2008 @04:44PM (#23674843) Homepage
    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.

  • Oh Joy (Score:2, Interesting)

    by Jewfro_Macabbi ( 1000217 )
    I've been a happy Alltel customer since December - glad to know I can look forward to higher prices, lower customer service, and a throttled internet connection - now likely to be run straight through NSA central. I'm thrilled.
  • Corporations shouldn't be allowed to buy other corporations. It wasn't like that in the beginning, but railroad tycoons wanted to consolidate and argued that corporations should have all the rights (but none of the responsibilities) of an individual person.

    Allowing corporations to merge is against every principle the free market stands on.
    • If you could not sell a corporation there would be far less incentive for investors to put money into a startup - which would be a huge problem in terms of stimulation of economic growth. Nor could corporations sell themselves by issuing stock in order to raise money for expansion.

      Corporations are assets with value to be bought and sold just like everything else. It is an essential part of modern capitalism.

      • Re: (Score:2)

        by sporkme ( 983186 ) *
        Thanks, and agreed. It seems that people fail to realize that there is no "capitalism rulebook" by which all free trade is conducted, and that the concept evolves and changes constantly with each free market experiment and each limitation imposed.

        Your quote of the day:
        "When buying and selling are controlled by legislation, the first thing to be bought and sold are legislators." --P. J. O'Rourke
        • So how does this 'fair tax' work if you don't have a 16th amendment? It seems to me that if you are going to tax based on something other than head count you need the 16th.

  • Well, that was fun.... (Score:3, Interesting)

    by Delecron ( 1012817 ) on Thursday June 05, 2008 @05:49PM (#23675747)
    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.

  • I haven't renewed my Verizon plan for 5 years. I sure as hell won't when the 3G iPhone arrives and this consolidation of competition makes me want to vomit.

    Capitalism my f'n ass.

    Where is the broad competition? I see a group of Lords running the Phone companies, once again.

    This f'n country just loves to sodomize it's patrons over and over again.

  • Some Insight: rural areas and future access (Score:3, Informative)

    by vinn ( 4370 ) on Thursday June 05, 2008 @07:47PM (#23676885) Homepage Journal
    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: (Score:2)

      by sporkme ( 983186 ) *
      Interesting. So AllTel was allowed to compete with Verizon, but in buying AllTel, Verizon will not be allowed to be a sole provider, and even worse will be forced to yield the turf to another competitor, who will then be their competitor for that area? Is this only for markets where only AllTel and Verizon exist? I can believe that the regulations would stipulate something so ridiculous, but it seems that all Verizon would have to do is to spin off something like "MontanaTel" in which to entrust the mark
  • In California Verizon has the best overall network. The big losers in this deal are Sprint and T-Mo. AT&T doesn't need to worry because it's got Apple on their side for 4 more years.

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