By William Trent, CFA of Stock Market Beat
Here’s the rumor. Verizon to Become Largest National Carrier by Swallowing Alltel (Mobile Magazine):
The CDMA landscape in the United States may be set for a pretty significant change as Verizon Wireless is very interested in buying Alltel, effectively making it the largest national cellular phone carrier based on number of subscribers. If the merger goes through and is approved, the Verizon-Alltel conglomerate would “tower over Cingular by about 10 million” customers.
Here are the facts:
- The two companies already have a joint roaming agreement giving them favorable terms to allow their customers seamless service
- Any deal would have to get past Verizon’s wireless partner Vodafone
- Verizon has been working so hard to get liabilities off its balance sheet it is hard to imagine them putting new ones on
- However, given Alltel’s recent spin-off of its landline business it seems they want to do something, and the logical partners are CDMA carriers Verizon and Sprint/Nextel
- Verizon can’t seem to let AT&T make a deal without doing one of its own, and it is now Verizon’s turn
Do these add up to a deal? They shouldn’t, but they certainly might.
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