Alltel to buy Western Wireless
As the cell phone industry rapidly consolidates (Cingular's acquisition of AT&T Wireless and Sprint's purchase of Nextel), the smaller players are scrambling. So this week's announcement that wireless provider Alltel is acquiring Western Wireless (Cellular One) for $4.4 billion comes as little surprise.
Alltel, currently #6 cell phone company (it will #5 after the Sprint deal is finished), has about 8.5 million subscribers, mostly in the South and West of the US. It also has some land line operations. Western Wireless has around 1.4 million U.S. customers in 19 western and midwestern states. It also has around $1,4 customers abroad, mostly in Ireland and Austria.
Both companies specialize in rural cell phone service. An AP wire story reports ("Alltel Buying Western Wireless for $4.4B", 1/10/05) quotes an industry analyst as saying that the purchase of Western Wireless should help Alltel protect its position in the industry.
"Although the proposed acquisition does little to change the wireless hierarchy, it does shift the balance of power as Alltel gain market share in overlapping areas and becomes a significant roaming partner to all national players….We expect more rural wireless M&A activity."
Alltel is itself generally considered an acquisition target for the big three (Verizon Wireless, Cingular, and Sprint). This move may make it an even more valuable acquisition for those companies. #4 T-Mobile's fate is also up in the air.
With the midrange wireless firms being swallowed, there remain only a group of smaller regional companies out there. According to a Wall Street Journal article ("Alltel to Buy Western Wireless In Deal Valued at $4.3 Billion", 1/11/05):
The deal is expected to be the first of many among smaller, regional wireless carriers. "I doubt this is the last chapter," said Scott Ford, Alltel's president and chief executive. "It's just hard to predict how it will play out."
5:05:50 PM 
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