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.'"

Comments

Can you say "Monopoly" ?

[unity100]

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:Can you say "Monopoly" ?

[DragonWriter]

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]

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.

Re:Consumers?

[robo_mojo]

Fewer choices and greater prices.

Re:yeah.. but..

[Constantine XVI]

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:I love merger's

[Nom du Keyboard]

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.

Re:Great...Ordering of Priorities

[DigDuality]

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

Customer backlash?

[jyunderwood]

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?

Re:Monopoly 2.0

[indiejade]

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 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 less choice, even if -- and especially if -- the suit does go to the Supreme Court.

It's probably very interesting to note what kind of correlation there is between the states' litigation against Verizon (and its cronies) and the areas Alltel serves: like "dollars of litigation" total in rural states vs. the "dollars of litigation" in the cities that Verizon tends to serve. Very interesting indeed.