FCC provides VZW/Alltel details
Final plans await close
November 18 2008 - 5:59 am ET | Allie Winter | RCR Wireless News
Verizon Wireless is expected to close an undisclosed number of Alltel retail outlets following the closing of its acquisition. The fate of Alltel’s offerings remains to be seen.
Photo credit:Benjamin Krain/Bloomberg News
The Federal Communications Commission released details of its approval of Verizon Wireless’ acquisition of Alltel Communications L.L.C., including the five additional markets that need to be divested. The ball is now in Verizon Wireless’ court to close on the deal that will propel the carrier past AT&T Mobility as the industry’s largest operator.
According to the FCC documents, 218 markets were flagged as potentially becoming less competitive following Verizon Wireless’ acquisition of Alltel, including the 85 markets Verizon Wireless originally said it would divest in order to win approval for the deal. Verizon Wireless eventually added 15 more markets that it would divest.
Following further analysis, the FCC trimmed its list of required divestitures to 105 markets, adding Lyon, Iowa; Johnson, Tenn.; Muskegon, Manistee and Newaygo, Mich., to Verizon Wireless’ 100 markets.
The FCC said Verizon Wireless would have 120 days following the close of the deal to divest the markets. The divestitures are to include spectrum, network assets and customers. Unlike past divestitures, Verizon Wireless will have to include all spectrum held in the flagged markets, including 1.9 GHz spectrum and the AWS-1 1.7/2.1 GHz spectrum.
Everything must go
“Everything goes with the market. They will not become integrated with Verizon Wireless,” said Verizon Wireless spokeswoman Robin Nicol. “But a customer can make a personal decision whether they want to change carriers. Nobody is imprisoned with a wireless carrier.”
Nicol’s comments hint that while Verizon Wireless will have to give up any customers still on Alltel’s network following a sale, the carrier is looking at wooing potential subscribers to Verizon Wireless. Complicating the process could be Verizon Wireless’ decision as to which Alltel offerings it plans to keep, including its popular MyCircle plans. Nicol declined to comment on any rate plan integrations prior to the deals final closing. However, both carriers said that prepaid customers will benefit because they won’t have to re-enter their called number when roaming from the one network to the other, which is the current method for both companies.
The FCC did not put conditions on the divestitures, but did recommend that the Verizon Wireless consider regional, local and rural providers when choosing a buyer. The carrier did say there will be store closings and job cuts, but provided no specifics.
The list of potential buyers for the markets is limited as past acquirers of divested markets have themselves been acquired. The most likely buyers would be CDMA carriers looking to expand their rural footprint, such as a U.S. Cellular Corp. or other regional players.
Network integration is expected to be straight forward. Verizon Wireless said it plans to upgrade Alltel’s current CDMA2000 1x EV-DO Revision 0 network assets, which currently cover 76% of its potential customers, to the higher-speed Revision A standard within one year of the deal’s closing. Verizon Wireless expects to finish CDMA network integration within 18-24 months after the close and will move forward with plans to launch Long Term Evolution technology in its network and in Alltel service areas. Verizon Wireless said it expects LTE deployment going a bit quicker in rural areas as it will be able to utilize Alltel’s existing infrastructure.
The FCC ruling also held Verizon Wireless to its offer to continue operating Alltel’s GSM network that is used to provide roaming services. However, Verizon Wireless said it had no plans to expand the GSM network’s current coverage area, nor was it bound to upgrade the network beyond its current 2G technology. This decision could leave roaming partners short on 3G coverage.
December 5, 2008 06:07 pm
I'm an Alltel sales rep and all that anyone seems to be worrying about is My Circle, but I have to agree with Nick on the note that it will be pointless... The real issue is if your current rate plans will be grandfathered in... and if so, how long will it last? Will I be forced to choose one of there overpriced rate plans when my current contract is up? Honestly I am rather excited about this merger, Verizon's lineup of phones blows Alltels choices way out of the water... If anyone has any information regarding when Alltel customers can add a line or upgrade to a Verizon phone please post it. I haven't been able to get the guys up in corporate to talk much on that...
December 4, 2008 09:10 am
I work for Alltel and I can truthfully say every customer that walks in the door with any questions on merger has promised faithfully to move over to AT&T if Verizon drops my circle program. Most are angered by the merger because of past dealing with Verizon and there high cost rate plans and limited download capabilities on there wireless internet services. Will be an interesting turn of events for sure. Although coverage will be increased tremendously I still believe based on customer feedback My Circle Program will play a huge roll in whether or not current Alltel customer's stay after the merger. We have already had lots of people who are reluctant to renew contracts and purchase new phones based on that alone. People are leary to get locked in to new contracts because there is just not enough information to make them comfortable enough to commit.
November 26, 2008 06:21 am
My circle was a joke since it was released.
November 24, 2008 06:39 am
I work for alltel and I know that a lot of people are concerned about how their service is going to be. Where I am located verizon service is not good at all so that is a major concern.
November 20, 2008 08:43 am
Nick, My Circle includes all networks and landlines too. Verizon currently has little presence in my state, so My Circle has tremendous value now and post-merger.
November 19, 2008 05:59 am
Why would you need to keep my circle if you get not only Alltel to Alltel but Verizon Wireless customers too? That would be over 100 million people you can contact for free. My circle at that point would be pointless.
November 19, 2008 05:59 am
Question I have is, will this merger allow for both better rural communications on the new Verizon while maintaining the current existing coverage in the major markets??
November 19, 2008 05:59 am
I am sure they will grandfather those on MyCircle plans until they migrate to Verizon equipment and plans. Beyond that is anyone's guess. If they are smart they'd adopt the concept for their own but given that they'll have around 80M customers when the deal is done they may not see the need.
November 19, 2008 05:59 am
Hello USCC to TriCities, TN
November 19, 2008 05:59 am
If My Circle is eliminated, Verizon Wireless should expect very high churn. There are very few replacements or incentives that will convince people to stay if My Circle disppears.