Rumor Mill: Verizon Wireless to acquire Alltel

Reports have surfaced in various consumer blogs that Verizon Wireless is keen on acquiring Alltel. This news comes just days after Alltel's CEO Scott Ford gave a nod to old acquisition rumors by noting that the carrier is reviewing "a broad spectrum of options." Verizon spokesperson Jeffrey Nelson said "We have no comment on this." Alltel could not be reached for comment.

Ken Hyers, analyst with Technology Business Research, says Verizon Wireless is the most plausible candidate to take over Alltel. "It would certainly fill in Verizon's coverage gaps. They already do extensive roaming on Alltel's network so from a finance standpoint it would make sense to save on those roaming costs," Hyers says. Hyers also noted that now is the time to act: "From a timing point, though, if there was going to be a consolidation like this, now's the time to do it. They've got to do it before 2008, because if the Democrats come to power, well, this same laissez faire attitude toward consolidation isn't going to continue under a new administration."

While Cingular would lose any claim to being the biggest carrier in the U.S. (by any metric) Sprint might be the biggest loser should this rumored deal come to fruition. "It would be hard for any other operator to reach that size, especially given the amount of penetration we already see in this country," Hyers says.

Plus a Verizon acquisition of Alltel would likely cause some difficulties for Sprint's roaming arrangement with Alltel.  "The Alltel roaming deal is essential for Sprint, since its coverage is not that good in some rural areas," Hyers says. "The roaming deal might not necessarily be lost right away [it depends on the terms of current contract] but renewing it might be another matter."

For more on the rumored Verizon Wireless-Alltel tie-up:
- see this post over at Engadget