Verizon Takes All of Alltel
Verizon and Alltel had announced that Verizon will buy AllTel. Technically, they are being bought for $28.1 billion, which is slightly higher than what it cost a private equity group and Goldman Saks to take it private at $27.5 billion last year. It is really not as simple as a $0.6 billion profit. Verizon is paying $5.9 billion in cash including $1.4 billion in cash that is already in Alltel. The rest $22.2 billion is debt that Verizon has agreed to assume. But Verizon is sure to refinance the debt portion, so it is an even better deal for Verizon.
Verizon and Alltel are like mirror opposites when you look at their coverage maps. They are a perfect fit and use the same technology. It is a win-win for all, except maybe for Alltel’s customers. Their combined customer base of over 80 million customers will top AT&T’s 71 million to make Verizon the biggest US phone company.
Just remember that these huge US phone companies are still small compared to China Telecom with its 250 million subsribers. And China Telecom is dwarfed by China Mobile with its 400 million subscribers. For some perspective, the population of the US is just over 300 million men, women and children.
Tags: Alltel, China Telecom, coverage maps, Goldman Saks, Verizon