Verizon Wireless Completes Purchase of Alltel
It’s finally official: Verizon Wireless is now the largest carrier in the U.S., with more than 83.7 million total customers. As expected from the terms of the transaction, Verizon Wireless paid approximately $5.9 billion for the equity of Alltel and took on approximately $22.2 billion of debt.
Before approving the deal, the Department of Justice and the Federal Communications Commission required that Verizon divest overlapping properties in 105 markets across 24 states to preserve competition. A full listing of the areas that will be sold is available here. The licenses and assets for the markets to be divested are currently in a management trust, which will continue to operate the markets until they are sold.
In markets that will be retained and combined with Verizon Wireless, the company intends to continue using the Alltel brand for several months as it works through the integration process. During the transition, Alltel customers’ current service plans, prices, and features, including My Circle, will remain the same.
Alltel customers can look forward to a letter in the next few weeks to let them know about the purchase, along with new services that will be available after the transition. Once Alltel systems are upgraded, Alltel customers will have access to Verizon Wireless’s mobile-to-mobile calling community. The official rebranding of Alltel to Verizon Wireless will begin in the second quarter and continue through the third quarter of 2009.
Even though the two companies are one now, they’ll be operating as separate companies for the time being. For example, should an Alltel customer wish to become a Verizon Wireless customer before the integration is complete, they’ll still be subject to all applicable terms and conditions, including early termination fees. In addition, those customers will have to sign a new customer agreement with Verizon Wireless.
While most users won’t have to purchase a new device, Alltel and Verizon Wireless caution that “a small percentage of Alltel customers (less than 1 percent) may need to replace their wireless devices for use on the Verizon Wireless network after the conversion.”
As we mentioned, Alltel’s widely advertised My Circle will be available to Alltel customers while they are on an Alltel plan, but there’s no word yet if Verizon Wireless will continue to offer this plan to new and existing Verizon Wireless customers.
Even though we now have a few more details about the merger, there are still plenty of questions to be asked and answered. As with any merger, it will take time to integrate the companies and sort everything out.