Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Mobile

    AT&T Buys Alltel as Carriers Rush to Snap Up Wireless Spectrum

    By
    Wayne Rash
    -
    January 24, 2013
    Share
    Facebook
    Twitter
    Linkedin

      Once again, AT&T is trying to acquire another cell company, but unlike the ill-fated T-Mobile deal, this time AT&T will probably be able to pull it off. Chances are that you remember when Verizon Wireless bought Alltel a few years ago as a way to expand coverage. But 105 of those Alltel markets had to be divested as part of the deal.

      AT&T bought most of those divested markets at the time, and the rest of them went to Atlantic Tele-Network (ATN), a company that operates a number of small regional carriers in the United States and elsewhere. Part of what ATNI owns and is proposing to sell to AT&T is the remains of the Alltel network in six Southern and Midwestern states.

      This deal is far different than the attempt to acquire T-Mobile, and those differences make it likely that AT&T will face little opposition. The current Alltel covers primarily rural areas where AT&T’s coverage is at best, very thin. Getting broadband coverage in rural areas is consistent with the FCC’s National Broadband Plan, and having that coverage from a major player is something the FCC wants. In addition, it provides real competition to Verizon Wireless in these areas, which the FCC and the Justice Department also want.

      Of course, AT&T wants to buy Alltel for other reasons besides those rural customers. Alltel owns spectrum in the 700MHz, 850MHz and 1900MHz bands where AT&T already operates. While Alltel customers are currently living in a CDMA world, all this means is that the company will have to provide a transition plan and eventually provide new GSM handsets to customers as the network moves to the new technology.

      For Alltel customers, this means that they’ll have access to AT&T’s handsets, including the iPhone, and that they’ll be able to roam over a much broader part of the world. For AT&T customers, it will mean that they’ll have dramatically better coverage in states where Alltel is currently a major carrier. T-Mobile customers may also see some benefits since AT&T and T-Mobile have roaming agreements in some of the areas Alltel currently serves.

      Because Alltel is relative small, the financial impact of acquiring the company is unlikely to have much of an effect on AT&T’s bottom line. Neither is the relatively small cost of transitioning the existing 585,000 subscribers and acquiring the retail locations likely to have an adverse effect on AT&T. ATNI will keep the remainder of its wireless companies and will be able to use the $780 Million to invest in its existing network.

      AT&T Buys Alltel as Carriers Rush to Snap Up Wireless Spectrum

      So is it really a win-win for both sides? At this point it seems to be. So far no opposition has surfaced, even from groups that frequently oppose AT&T on almost everything they try to do. While it’s too early to know what the reaction of the regulatory folks will be, it seems that the chances of this deal being approved are fairly high. The FCC approved AT&T buying the parts of Alltel that were divested by Verizon Wireless years ago. There doesn’t seem to be much likelihood that they’ll fight the deal to buy the rest of it.

      But there’s more to this deal than just a fairly minor acquisition by AT&T. What you’re seeing here is likely the wave of the future until the FCC frees up more spectrum, and that won’t happen for a while. The FCC has already announced plans to auction off new spectrum in the 1900MHz band, but government users occupy those frequencies, and the spectrum can’t be sold until the current users are located to other frequencies.

      Meanwhile, AT&T is in the midst of a major spectrum shift, but it can’t complete that shift without more spectrum. By buying the spectrum Alltel owns, AT&T solves part of its spectrum crunch. But Alltel won’t solve the whole thing.

      In fact, the chances are very good that you’ll see more moves by AT&T to stitch together a spectrum map that gives it the bandwidth it needs. To accomplish this, AT&T will need to make piecemeal acquisitions of spectrum from wherever it can find it.

      But this need to acquire spectrum isn’t just an AT&T story. You’ll remember that Sprint announced it was planning to buy the part of Clearwire it doesn’t already own, and that Dish has announced a plan to buy Clearwire out from under Sprint. Both companies need spectrum badly enough to wage financial war over it.

      And it won’t stop there. Small carriers are the low-hanging fruit of spectrum acquisition, which is why T-Mobile announced its plans to acquire MetroPCS in a move similar to the AT&T acquisition of Alltel. But there’s also wireless spectrum in the hands of noncarriers, which is why an ongoing effort is happening to buy spectrum from cable television companies, for example.

      Until the FCC frees up more spectrum that carriers can use for LTE, the small acquisitions you’re seeing are the direction of the wireless business. Larger carriers will gobble up smaller regional carriers where it makes sense. Right now, if there’s a real winner in all of this, it’s the stockholders of those small regional carriers who may have found the path to true riches.

      Wayne Rash
      https://www.eweek.com/author/wayne-rash/
      Wayne Rash is a freelance writer and editor with a 35-year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He is the author of five books, including his most recent, "Politics on the Nets." Rash is a former Executive Editor of eWEEK and a former analyst in the eWEEK Test Center. He was also an analyst in the InfoWorld Test Center and editor of InternetWeek. He's a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×