Seeking Alpha
Profile| Send Message|
( followers)  
Here’s the rumor: Verizon to Become Largest National Carrier by Swallowing Alltel.

The CDMA landscape in the United States may be set for a pretty significant change as Verizon Wireless (NYSE:VZ) is very interested in buying Alltel (NYSE:AT), 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 (NASDAQ:VOD)
• 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 (NYSE:S)
• Verizon can’t seem to let AT&T (NYSE: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.

Source: Verizon Wireless To Swallow Alltel Corp?