Alltel Buyers Emerge

Wireless Week –Monica Alleven – May 25, 2007 – After Alltel Wireless announced its new buyers, private equity firms TPG Capital and GS Capital Partners, speculation turned to what's in store for the company after it's no longer a public company.

How much TPG and GSCP will invest in Alltel remains to be seen, but in a statement, Alltel CEO Scott Ford said they are long-term investors willing to do what's necessary to grow the business in all of its markets. The carrier has about 12 million customers.

Some analysts had expected another operator to buy Alltel rather than the private equity firms, some of which target companies that are in trouble. That is not the case with Alltel, which reported record wireless revenues in 2006. But a likely suitor, Verizon Wireless, probably viewed the price as too high, and it can participate in the upcoming 700 MHz auction if it wants to gather more spectrum, notes Ken Hyers, analyst at Technology Business Research.

With the kind of financing the private equity firms have at their disposal, they could conceivably turn Alltel into a "real powerhouse," taking the industry from four majors back up to five, he says. "What's made Alltel successful is they've competed in markets that the majors haven't focused on," and the carrier has done well in gaining roaming partners and revenue.

Some analysts expect more consolidation among the Tier 2 and 3 carriers, many of which are rural in nature. Gartner analyst Phillip Redman notes that the cable companies can't be ignored, either, but he doesn't see the big carriers, like Verizon Wireless, as being that interested in acquiring rural properties because it wouldn't be cost effective to invest in areas where the number of total potential customers is small.

In other Alltel news, the carrier this week rolled out City ID, which identifies the location of incoming phone numbers by displaying the city and state assigned to a landline or wireless number.

Provided by Cequint, City ID initially will be pre-installed on the LG AX275, but it will be available on more Alltel phones in the future. At launch, Alltel is offering a free 7-day trial; later devices will include a 15-day free trial. After the trial ends, the app will be available for a monthly charge of $1.99.

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