Scott Ford

Verizon snaps up Alltel for $28.1B

Sue Marek — Thu, 05 Jun 2008 10:32:00 -0400

The rumors are true. Verizon Wireless announced this morning that it will purchase Alltel Corp. in a cash merger valued at $28.1 billion. The deal, which is with Alltel Corp. and Atlantis Holdings (an affiliate of private investment firm TPG Capital and GS Capital Partners), is structured so that Verizon will acquire the equity of Alltel for approximately $5.9 billion. Based on Alltel's projected net debt at closing of $22.2 billion, the aggregate value of the transaction is $28.1 billion.

The merger is expected to close by year-end and is subject to regulatory approvals. This will make Verizon Wireless the No. 1 wireless operator in the U.S. with nearly 80 million subscribers. Verizon currently has more than 65.7 million customers while Alltel has about 13.2 million subscribers in 34 states. AT&T will move to the No. 2 position with about 71.4 million customers.

The deal makes sense in many ways. Alltel has been a long-time roaming partner for Verizon and it currently operates in 57 markets that Verizon does not serve. And there are more similarities: Like Verizon, Alltel is a CDMA carrier using the Qualcomm's BREW platform for content delivery. Alltel also has recently announced plans to migrate to the LTE technology for its 4G path, a move that Verizon has also said it will make.

Alltel President and CEO Scott Ford will continue in his current position as head of Alltel until the merger is completed.

Verizon says that after integration costs it expects to realize synergies of more than $9 billion from reduced capital and operating expense savings.

In a research note, Matt Thornton, analyst with Avian Securities said that while the deal will temporarily benefit LG and Nokia because it will mean that LG, which has a dominant presence with Verizon, will now be able to extend into Alltel territories. Nokia, which is expected to release two or three new CDMA devices for Verizon later this year may also see benefits from this merger.

For more:
-See this release

Related stories:
Verizon in talks to buy Alltel
Private equity firms snag Alltel for $27.5B
Rumor Mill: Verizon Wireless to acquire Alltel

Alltel joins AT&T, Verizon Wireless with LTE roadmap

Brian Dolan — Fri, 16 May 2008 11:47:35 -0400

During its first quarter conference call with investors, Alltel announced that it was committed to evolving its network to LTE over the next five years. The move makes Alltel the second biggest CDMA carrier in the U.S., after Verizon Wireless, to commit to the LTE standard, even though LTE was originally on the GSM evolution path.

"We do currently plan to move towards LTE in the three-to-five year timeframe vs. WiMAX, but we're still early in that," President and CEO Scott Ford said during the call.

Alltel's COO Jeff Fox, however, noted that the carrier won't be talking seriously about LTE this year. "We are working through our planning phase and will be talking to our board about all that over the next two quarters," Fox said. "Certainly there's no money for 4G evolution anytime in our near-term plans, and so I think from a cash-flow perspective you should not expect to see us talking about 4G anytime at least in 2008."

For more on Alltel's LTE choice:
- read this RCR article

Exec Pay: Who makes what in wireless?

Wed, 12 Mar 2008 07:59:59 -0400

Exec Pay: Who makes what in wireless?

Few issues stoke the ire of workers like executive pay. The average CEO of Standard & Poor's 500 company list made $15.06 million in 2006, which is the most recent year for executive compensation figures. The ten U.S.-based, public wireless company CEOs whose pay we tracked averaged about $18.34 million in 2006. Only half of them are on Standard & Poor's 500 list.

Because every company has their own nuanced approach to executive compensation, we tried to make it easy and follow the new 2006 rule that the SEC requires public companies to disclose total compensation, which includes salary, bonus and "other" compensation. The "other" compensation category includes vested restricted stock grants and "stock gains," the value realized from exercising stock options during the past fiscal year.

Just today AT&T announced its executive compensation figures for 2007. Chairman, president and CEO Randall Stephenson, who took over from Ed Whitacre Jr., received total compensation of close to $22 million. President and CEO of AT&T Mobility Stanley Sigman received compensation of $36.9 million, before he retired at year-end. Ralph de la Vega, who took over for Sigman, received $12.4 million in 2007.

Whether it was because of retirement or a forced resignation, some of the CEOs in our top ten list--Sprint Nextel's Gary Forsee, Motorola's Ed Zander and AT&T's Ed Whitacre Jr.--are no longer at their posts. Take a look back at what these executives and their still-gainfully-employed colleagues made back in 2006. How much does it cost to retain a wireless leader? Here are ten answers that brought varying degrees of success. Click here to see the start of the report, or select a name below. -Brian

Ed Whitacre Jr., AT&T CEO

Paul Jacobs, Qualcomm CEO

Ivan Seidenberg, Verizon CEO

Gary Forsee, Sprint Nextel CEO

Scott Ford, Alltel CEO

Ed Zander, Motorola CEO

Mike Zafirovski, Nortel Networks CEO

Michael Gallagher, FiberTower CEO

Doug Hutcheson, Leap Wireless CEO

Steven Dussek, Dobson CEO

Alltel restructures post-acquisition

Fri, 02 Nov 2007 07:59:55 -0400

TPG Capital and GS Capital Partners expect to close on their acquisition of Alltel by Nov. 16, at which time the carrier will restructure its management team. Post-acquisition, Jeffrey Fox, Alltel's group president of shared services will become COO of the carrier. Fox will continue to report to Scott Ford, the CEO. Rick Massey will continue in his role as general counsel but add chief strategy officer to his duties. Kevin Beebe, group president of operations, will become a consultant to Alltel and TPG and GSCP to work with both firms on their current portfolios and new investment possibilities.

For the other half dozen executive role changes at Alltel:
- take a look at the press release

Related Articles:
FCC approves $24.7 billion acquisition of Alltel Article
PE firms snag Alltel Article
April: AT&T-Alltel rumors gathering steam Article
March: WSJ says Alltel looking for buyer Article

Alltel buyout on track; record-setting postpaid adds

Wed, 01 Aug 2007 06:59:56 -0400

In what will likely be the last earnings call for Alltel, company executives told analysts that the company's anticipated $24.7 billion sale to TPG Capital and GS Capital Partners, a subsidiary of Goldman Sachs, is making progress. Alltel shareholders are expected to approve the transaction at a shareholder meeting Aug. 29 and CEO Scott Ford says that he expects a favorable FCC vote on the deal to happen this year.

The wireless carrier did suffer a 54 percent decrease in second-quarter profits compared to the previous year. The drop was a result of the firm selling its landline phone business.

On the wireless front, however Alltel is prospering. The firm added 181,000 postpaid subscribers bringing its total customer base to more than 12.2 million.

Churn was 1.67 percent, down from 1.9 percent a year ago. Average revenue per user was $54.10, an increase of 3 percent year over year. Data revenue was $5.63, an increase of 73 percent year over year. Data revenue now accounts for 12 percent of the firm's retail revenue.

For more on Alltel's 2Q results:
- see this press release
- also read this WSJ article (sub. req.)

Related articles:
Private equity firms snag Alltel for $27.5B
Record low churn for Alltel