Network integration becoming second nature for Verizon Wireless, AT&T Mobility: VZW’s plans for Alltel integration similar to RCC’s 4-step process

If Verizon Wireless completes the acquisition of Alltel Communications L.L.C the same way it has with previous purchases, there are a few certainties: the network comes first and don’t expect the Alltel brand to morph into Verizon Wireless overnight.
For example, the carrier closed its acquisition of Rural Cellular Corp. in August, but has taken baby steps to integrate RCC’s operations. Verizon Wireless spokeswoman Robin Nicol said RCC’s CDMA network in Minnesota and South Dakota has already been re-branded as Verizon Wireless and customers can purchase the carrier’s products and services. These customers were not required to get a new handset unless they were heavy data users.
“It’s up and running (there),” Nicol said. “That integration was able to take place faster.”
Of the 10 stores in Minnesota and South Dakota, one was closed, five remain open and four were converted to agent stores.
As for RCC’s GSM network, Nicol said Verizon Wireless has built out CDMA technology in those remaining markets, except for a few pockets in the northeast due to weather-related issues. Verizon Wireless will leave the GSM network in place, but plans to finish its accompanying CDMA network in all remaining areas by the end of February, Nicol said.
Four-step process
Indeed, upgrading and building out a network is not just an important part of acquiring a company, but it’s the first step of a four-step process Verizon Wireless employs when converting a company after an acquisition. After network conversion comes the billing conversion, followed by customer communication and finally brand launch. Sometimes it doesn’t go in that order, but brand launch is usually saved for last, Nicol said.
“As each market goes through with billing conversion, that’s kind of the trigger for our brand launch,” Nicol said. “We wait to launch the brand until the customer has the full Verizon Wireless experience.”
With the RCC integration, however, the markets in Minnesota and South Dakota are the exception to the rule. The two areas have already been re-branded to Verizon Wireless, yet have not gone through the billing conversion. Markets in the Midwest, including Minnesota and South Dakota, will be the first area to go through the billing change, Nicol said, and that is scheduled for March. The last billing conversion, of the Northeast, is scheduled for May.
Alltel acquisition
Verizon Wireless’ integration of Alltel should follow very similar lines as it will be integrating both a CDMA and GSM network and said it will continue to support the GSM network to appease government regulators.
Many Alltel customers are waiting to find out if there will be major changes in products and plans, especially Alltel’s popular MyCircle plans. If RCC is any example, don’t count on it. Nicol said the RCC’s rate plans will be mapped and when a customers’ service agreement ends, they will have to choose from Verizon Wireless plans. Alltel will follow the same transition plan as RCC, Nicol said, but because Alltel has a majority of CDMA operations, the integration will move quicker.
Divestitures
Verizon Wireless was forced to divest assets in both the RCC and Alltel acquisitions. Two trusts operate the assets in the divested markets, one which included properties that were divested to AT&T Mobility through its acquisition of Dobson Communications Corp. The other trust is made up of properties in South Dakota and Minnesota that have not yet been sold and will be divested as part of the Alltel acquisition, Nicol said.
Add those rural cellular markets to the 105 markets Verizon Wireless must sell to buy Alltel, and it’s safe to say the carrier is prepping for a pretty big garage sale. Recent speculation has AT&T Mobility and private-equity companies interested in the Alltel markets.
Case by case
AT&T Mobility has successfully converted and acquired many smaller carriers, including, Dobson which closed in late 2007. AT&T Mobility began implementing its brand and products immediately after the deal closed, though Mark Siegel, AT&T spokesman, declined to comment on any details of the transition. Siegel did say, however, that when it comes to acquisition there isn’t a real set-in-stone practice for conversion. Each deal is different and handled on a case-by-case basis, Siegel noted.
AT&T Mobility’s pending acquisition of Centennial Communications Corp. is still waiting for regulatory approval; AT&T Mobility is set to acquire Centennial’s wireless operations, including 1.1 million customers, for $944 million. AT&T Mobility has said the acquisition will enhance its network coverage in the Midwest, southeast U.S., Puerto Rico and the Virgin Islands.