YOU ARE AT:WirelessLook(ing) out for No. 1: Verizon Wireless set to overtake AT&T Mobility

Look(ing) out for No. 1: Verizon Wireless set to overtake AT&T Mobility

Nov. 4, 2008, will go down as a historic day both for the country as well as for the wireless industry. The impact of the presidential election is probably self-evident and better explained by those with more knowledge on the subject. But the impact of the Federal Communications Commission’s approval of Verizon Wireless’ acquisition of Alltel, and to a lesser extent on the Sprint Nextel-Clearwire WiMAX tie-up and white-spaces issue, will create shadows on the wireless industry for years.
The combined VZW/Alltel will not only trump AT&T Mobility as the industry’s No. 1 player, but also places the new No. 1 as the main source of roaming for regional CDMA and GSM operators around the country. While the FCC will require VZW/Alltel to adhere to existing roaming agreements for the next four years, small carriers looking for long-term security are likely nervous. Verizon Wireless has tried to appease those concerned, but its wish for a two-year requirement shows the carrier is looking out for No. 1.
Some have noted that it makes financial sense for VZW/Alltel to continue to support roaming partners for the foreseeable future. Perhaps there is a valid point to this, but – as a number of smaller carriers in need of roaming to fill out their footprints have pointed out – the price for such access makes roaming partnerships a trying proposition for smaller players.
There could be some respite in the markets VZW will have to divest in order to complete the acquisition of Alltel. But today there are fewer players well-heeled enough to absorb the bathwater. Typically Alltel has been a prime candidate to acquire such markets, but that avenue is now closed, leaving only a handful of potential buyers. AT&T Mobility: Will the government let it buy more spectrum? Sprint Nextel: Will more spectrum really help the carrier? T-Mobile USA: A possible buyer, but it might demure from CDMA market conversions. Leap and MetroPCS: Do they really want or need spectrum in the Dakotas? U.S. Cellular: Another potential buyer, but it likely has operational issues to tackle.
While a number of questions remain about this deal, the overlying impact is that there is a new boss in town and business as usual is set for a change.

ABOUT AUTHOR