AT&T eyes divested Alltel assets
AT&T could end up with the lion's share of the wireless assets that Verizon Wireless must get rid of as part of its acquisition of Alltel, The Wall Street Journal reported Wednesday.
The newspaper cites sources who said that AT&T is among several bidders hoping to get their hands on the Alltel subscribers and network. The private-equity firms Carlyle Group and Kohlberg Kravis & Roberts & Co., supposedly are bidding on the assets together as is Providence Equity Partners on its own. At least one cable provider also has expressed interest, the Journal says.
In order to close its $28.1 billion acquisition of Alltel, Verizon Wireless agreed to sell off assets in 22 states to appease regulators. Included in these assets are 2.1 million wireless subscribers and wireless spectrum and equipment valued at around $3 billion.
AT&T is considered to be in the strongest position to bid on the assets, but consumer advocates and rural phone companies say that allowing AT&T to purchase these assets is bad for consumers.
Verizon Wireless and AT&T are the No. 1 and No. 2 wireless operators in the U.S., respectively. Together, they have over 160 million subscribers and account for nearly 60 percent of all cell phone service in the country. Critics, such as Gigi Sohn of Public Knowledge, told the Journal that Alltel's assets should end up with a smaller wireless player to spur more competition, rather than allowing the second largest operator to gobble up more customers and spectrum.
Rural trade groups believe that AT&T could charge expensive roaming rates to other smaller carriers in these regions, which could affect competitive pricing for consumers.
Even if AT&T ends up as the highest bidder for the assets, the deal still has to be approved by the U.S. Department of Justice. But because the deal will likely be evaluated market by market, AT&T could still end up with a significant amount of the assets if it is bidding for assets where it doesn't have a strong presence already.
Some people, such as Dan Meyer at RCR Wireless, argue that AT&T buying the divested Alltel assets might not be such a bad thing for consumers. Alltel primarily operates in rural markets, where national carriers don't offer service. And some of these consumers might be happy to have another national operator, such as AT&T, he said.
But the biggest benefit for rural consumers is that they could finally be able to get the Apple iPhone. AT&T is the exclusive carrier for the iPhone and many people in rural markets have complained that this exclusivity agreement has prohibited them from having access to the latest and greatest technology. While the real policy issue here centers around exclusivity deals, the fact remains that a big group of people want the iPhone and can't get it because AT&T isn't offered in their market.
So even though allowing AT&T to gobble up more spectrum and assets may hurt smaller wireless operators and could ultimately drive up wireless prices, I'm sure there are plenty of people living in rural areas where AT&T doesn't offer service today who would be more than happy for the chance to have an iPhone.
What do you think?
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
And if I get sold to AT&T there's really no way out without paying that evil machine big bucks.
You might want to fix AT&IT to AT&T.
You have got to be kidding that your going to base the sale of something on the fact you could get an iphone if AT&T bought thees areas......this is one of the least important factors in the process.
If I was in one of these areas and effected by this, AT&T is the 2nd to LAST carrier I would want to see purchase my area, behind only TMobile. With Sprint right behind these two. More like 1a TMobile, 1b ATT, 1c Spring, 2a Cricket, 2b MetroPCS
US Cellular is who needs to step up and make the investment to get these areas, if it can get the slimey bankers to loan some money instead of buying planes and giving bonuses.
It makes no sense for AT&T to purchase areas which are predominately CDMA, although some of these would have GSM/UTMS modes that would mesh with the existing AT&T network. MIxing network technology doesn't work, ask Sprint. Also there would be the cost of converting tower equipment, replaceing user phones in addition to the aquistion price. These areas would not be a good mesh for AT&T regardless if they need the coverage or not.
Theres more to this than if the users could get an iphone!
The first sentence gives an answer to your question.
And, ATTWS turned off their analog and TDMA networks about a year ago. Just sayin'.
None of these giant carriers are great, but Verizon is a far less sleazy organization than ATT, and treats their customers vastly better.
MetroPCS is CDMA, so that would be a good fit. T-Mobile is not, but they may just re-purpose the spectrum and/or customers/towers just like ATT would have done.
Using the potential availablilty of the iPhone as a backdoor to push through regulations is weird. Aside from that, the iPhone wouldn't be available anytime soon, because the Alltel network uses CDMA and the iPhone uses UMTS-based technology. Every cell tower would have to get equiped with a second technology, just to get the iPhone running. In other words, a nice carrot for populist political decisions, but likely far from reality.
ATT was spun off a few decades ago into the regional Bells. These seven baby bells, created to compete, colluded to destroy cable as a primary competitor.
During their growth period and entry into data (DSL), residential landlines, etc., ATT launched the wildly successful (for a time) ATT Broadband. ATT Broadband was the biggest cable and cable internet provider, until Comcast bought them out.
Fast forward to earlier this decade, and you see the "competitive" baby bells aligning together to create larger co-ops. SBC Ameritech's joint venture, Cingular Wireless was a great provider, but SBC And BellSouth didn't like that Verizon was gaining in terms of growth and revenue; Therefore the now powerful SBC Bought Cingular, and shortly after, BellSouth itself. Fast forward again a short time later, and the new inbreeding SBC makes a play for Ma Bell herself to complete the circle of one giant monopolistic telecommunications giant.
Throughout that period, much money was wasted on corporate rebranding and goodwill (From ATT, Ameritech to SBC, then to SBC Ameritech, and ATT- full circle). Now ATT is in the value segment of DSL, instead of the lucrative cable market it first pioneered and now the nations' number 2 wireless carrier.
Through all of this massive power grabbing, growth and obviously alarming trend of growth through acquisitions only, regulators must look at (if even only the recent history) what is best for these Alltel customers. We need a stronger third national carrier. While Sprint/Nextel are in sore financial shape, perhaps Deutsche Telecom and their T-Mobile branding here would do well with these few million customers. Sure, there will be network interoperability issues but ATT must not be allowed to continue unchecked.
And as my company runs all on Macs having an iPhone would work MUCH better for me than my Palm Treo
One other thing. Someone had posted up above about being able to drop the service within 30 days if a wireless company changes plans or policies. Well; I could be wrong. But I did read the other day that Verizon is going to stop doing that. I've got alot of friends that are with Alltel & they are sick that they have merged with Verizon.
As for me. I have had AT&T before they merged with Cingular. And all through going from Cingular back to AT&T. And the only time I had any problems were through the two hurricanes & the main towers got demolished. After about a month; everything has been smooth sailing. I have my blackberry & wouldn't dream of switching to Verizon. I hear so many people that down AT&T. If you had service for calls & internet like we do, you would absolutely love AT&T. That's fact.
1. I'll start with my stupid petty reason, I want an iphone, and currently my options to aquire one (as it is the best smart phone on the market.) is really not worthy as it won't allow me support options that AT&T customers are provided.
2. There will finally be a national GSM carrier in the state of Montana, which the state currently is without. Which leaves a LOT of phones currently on the market (and the best of the new phones) unavailable to MT customers.
- by aathorn June 8, 2009 6:13 PM PDT
- Having been with AT&T from Ameritech to Cingular to AT&T before moving to an Alltell area , I pray for the completion of the acquisition - have had no cell phone @ my rural home since July of 2008. Had to get a landline again - how inconvenient & expensive.
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