Verizon and Altell Merger

[david diehl]

not sure if this has been posted yet or not.
I was talking with a represenitive from Verizon wireless today and I was informed that Verizon wireless, and altell are in the process if merging,
not sure how long this process is going to take, and not even sure how long it has been going on, but should increase data for those who use teather.

 

[Paul Austin]

Only a couple months late

From June:

http://www.stormtrack.org/forum/showthread.php?t=16892&highlight=verizon

Perhaps it will result in better coverage. I have my doubts, as I've noticed Alltel and Verizon share towers over much of the country. My concern is the unlimited data plan Alltel has with no required contract. Will the plan still exist? Or will Verizon limit the total data? Time will tell, I guess.

 

[Robert Edmonds]

My concern is the unlimited data plan Alltel has with no required contract. Will the plan still exist? Or will Verizon limit the total data? Time will tell, I guess.

With companies these days, I bet further restrictions on the customer. As an alltel customer, I am not to happy with this. I didn't like verizon much when I had service through them.

 

[Jerry Prsha]

Sprint Deviation

A slight deviation from the path...

Sprint sold all their towers recently and are leasing them from the third party now. How odd is that?

 

[Scott Weberpal]

Sprint did not sell all of their towers. Sprint owned more than 20,000 towers and sold about 3,300 of them. This makes good financial sense considering they gain a significant amount of capital now and when renting the tower can write that off. Businesses sell building and lease them from the purchaser, airlines sell planes and lease them from the purchaser...it's not totally unheard of in the business world and makes perfect sense for a company currently strapped for cash.

EDIT: Just found out Sprint owns about 50,000 towers, the 20,000 is what they gained from Nextel during the merger.
http://biz.yahoo.com/ap/080723/sprint_towers.html?.v=1

 

[Jerry Prsha]

Sprint did not sell all of their towers. Sprint owned more than 20,000 towers and sold about 3,300 of them. This makes good financial sense considering they gain a significant amount of capital now and when renting the tower can write that off. Businesses sell building and lease them from the purchaser, airlines sell planes and lease them from the purchaser...it's not totally unheard of in the business world and makes perfect sense for a company currently strapped for cash.

EDIT: Just found out Sprint owns about 50,000 towers, the 20,000 is what they gained from Nextel during the merger.
http://biz.yahoo.com/ap/080723/sprint_towers.html?.v=1

I stand corrected... I read a story earlier that was incorrect...

 

[Gene Moore]

Chasers are running out of places to hide. Unless the gov'mt steps in to quash the mergers we're going to be left with t-w-o choices. Welcome to either AT&T or Verizon, both baby bell survivors (SW Bell and Bell Atlantic) of the original AT&T breakup. Unless a new type of Internet communication comes out of the sky to save us, it's one of those two for the near term. Either companies plan boils down to $100 a month for basic minutes + the (so called) unlimited cellular Internet. Both are more similar than dissimilar and with only Sprint remaining (what are they without Alltel), we're stuck. Let's hope for a cellular pricing war between now and next spring.

On the good side, Verizon will have increasingly dense coverage, especially over the central plains states.

 

[Scott Weberpal]

From what I understand (and I could be wrong), Sprint's coverage (both data and voice) will not be affected by Alltel merging with Verizon. Within the last 6 months, Sprint has vastly expanded their EVDO coverage in IL (now including Bloomington, Peoria, etc.) and WI and they continue to do so across the country.

I used ATT/Cingular in the plains from 2001-2007 and Sprint in 2008, and Sprint was by far superior in both data and voice coverage (with few exception being in small rural areas of OK and TX).

Sprint is continuing to show their dedication to wireless data access by already rolling out WiMax in a few larger markets well ahead of any similar offerings by Verizon or ATT. As fluid as the cellular market has been in the last decade, everything could be drastically different in 2 or 3 years.

 

[Rob Wadsworth]

My biggest question about all of this is: 'are they going to raise service prices or lower them to attract more customers now that need a larger customer base?

Walmart - as am example - sells more for less and goes long - an excellent business strategy from a country (China) that isn't even a capitalist democracy. This new Verizon/Alltel merger would be wise to learn this better strategy and go for long - now that they have the assets and their equipment online. To usurp business from their competitors would be - one would logically reason - job one.

I own a small amount of Verizon stock, but have an Alltel account because the deal is better. If this merger is to win, place, or show they will need to put out incentives for new accounts and NOT lose their present customers. This may be beneficial for those at the other end of the food chain. Like those who chase - for example - and tether data. If I sell my stock, it will be because the managment of this merger has lost their collective way.
I have an interest either way!

 

[Steve Polley]

The biggest concern I see right now is how Alltel/Verizon will handle their data customers once the merger is complete. I cancelled my Sprint card for their "5GB shennanigans" which have been well documented. I activated an Alltel card with unlimited data with hopes verizon will grandfather me in. Verzion at this time they still have a "5GB cap."Time will tell with this once the merger is complete.

 

[Rob Wadsworth]

Here's a bit of interesting info that may be useful in this already-done merger.

When Verizon bought Alltel, they paid 5+ billion dollars and also assumed Alltel's 17+ billion dollar debt as part of the deal.

That means that Verizon may very well keep the Alltel logos and name - so as to keep the cost down during this reorganization of the now much larger company. IMHO, it may be necessary for Verizon to offer some big incentives to increase the numbers for new customers.

Since the product of either Verizon and Alltel is just data, selling more of it should be the goal. It cost any company nearly as much for a million customers to get data as it does for two million - barring maintenence and staff cost. IMHO, it would be in their best interest to take advantage of this situation before AT&T does the same thing because Verizon/Alltel will need to rid themselves of this humongus debt in order to show a profit. If one company - either AT&T or Verizon/Alltel - does this first and does it with the biggest deals they can provide - will ultimately be the company that will win big or die trying.

Clearly - A price war looks imminent. Good for us Verizon/Alltel customers - bad for AT&T...
The AT&T customers may benifit from this price war, but the company may show a smaller per-quarter profit so they won't lose as many customers.
Verizon/Alltel may put ou great incentives for first-time cellular users - I think will be the thrust of their campaign IMHO

 

[Bob Schafer]

Rob,

There may some truth to what you say, but I took a quick peek at VZ's financials, and found that:

*VZ generated $25.7B in positive Cash Flow from Operating Activities in FY ended 12/31/07
*They reported Total Assets of $187B vs Total Liabilities of $136B
*They reported Net Income of $5.5B
*They had reported over $17B in 2007 and 2006 (each) for Capital Expenditures

Given those numbers, I don't think the acquisition of Alltel is likely to influence their marketing/operational strategies much. For a simplistic analogy, it would be sort of comparable to a McDonald's franchisee who already owns eight stores buying one more.

 

[Rob Wadsworth]

Thanks for that info Bob, I appreciate the feedback.
One must also consider that verizon/Alltel will only have one major competitor at this point.
You are quite right about Verizon's earnings, and as a stockholder of Verizon I should have been more aware of the particulars.
I think that i was trying to point out that it was a move on Verizon's part to obtain a larger portion of the market's share of cellular customers would be realized if they lowered prices in order to draw away AT&T customers.

I don't like the idea of having to pay out more for on-the-fly data while stormchasing, as some AT&T customers now have this stupid 5Gb cap on their account. Verizon/Alltel has a break/chance to upset the price/useage conditions that currently exist.

What are your thought on tha subject?

 

[Scott Bennett]

I think the 5GB cap is a way of life at this point, Alltel is the only one who does not have it.

The Alltel merger page had a statement with something lilke "Alltel contracts will be honored until they expire" or something like that, I wrote about it on my non weather blog here http://www.endlessbabble.com/?p=47

One thing I have noticed is all of my Sprint EVDO phones on my account (Smart and Blackberry) have not had the cap added to them and are all still unlimted.

My understanding on the Sprint cap is it's "Soft" as in don't do it or else.
You will need to blow by 2 of 3 months to get in trouble.
Also if your account is classified as business it's not capped at all, I have 4 EVDO cards at work and all still say unlimited.
Now don't take any of that as fact but more as a collection of information I found all over the place.

I have no problems with Alltel however I can't do business with Verizon again, I manage our companies 50 cell phones and it was a complete nightmare.

I really wish US Celluar had EVDO coverage because at least here in Nebraska/Iowa their coverage is tops.

I use about 300mb a day when I chase so im not scared, but I still don't like the cap, so thats still 15 chase days.

 

[Scott Weberpal]

Yes, Sprint is using a "soft" cap for the 5 GB limit. Any accounts started before the limit began will continue to say "unlimited" under the usage summary even though there is a "soft" 5 GB limit. Lots of good info about this on howardforums.com and evdoforums.com