Verizon Alltel merger would form largest carrier in the US (by far)

Just a quick bit of math and you can see that today's news doesn't bode well for AT&T, which has been enjoying its position at the top of the heap in major US cellphone carriers for quite some time now. While AT&T has a solid 71m subscribers under their belt, number two Verizon has 67m and number five Alltel has 13m -- which means this merger could potentially put 80m customers under the same roof. Clearly being able to claim the "most reliable" AND most widely used network in the US makes it a tantalizing deal for VZW, but the ~$2,100 they'll be paying per subscriber isn't lightyears away from the notoriously overinflated amount Sprint paid in their heyday for Nextel. That merger cost $36 billion, which turned out to be ~$2,350 per sub at around 15 million Nextel customers -- and we all know how well that deal turned out for Sprint. But we're sure they're thinking this will go more along the lines of AT&T's merger with Cingular, which worked out pretty damned well so far. So what's this thing named, anyway? Verizon Alltel? Veritel? Allizon? We think just Verizon, thanks.

[Flashpoint @ Jun 5th 2008 12:02PM]

Apple shoulda built a CDMA iPhone rather than the GSM model.

If they'd done that, they coulda formed a great deal with Verizon which would have given the iPhone access to EV-DO (which woulda shut all the "but its too slow" sayers up) and the iPhone would have had the widest networking abilities in America.

Good luck trying to unlock a CDMA iPhone !!!!

Apple could have insured that they would only be used by their subscribers SPRINT or VERIZON.

[Matt @ Jun 5th 2008 5:13PM]

So I guess that guy who plays the Verizon employee in the Alltel commercials is out of a job now...

[Mills @ Jun 5th 2008 12:05PM]

not entirely true... all you have to do is change the MIN and MDN and SID to your network, update the PRL. CDMA phones are very easy to use on CDMA networks.

As much as i would love apple to come out with the iphone on CDMA, the fact is that 99% of the rest of the world is GSM or a branch of GSM and so apple was aple to grab a larger market share. CDMA is a dead technology. you wont see it at all in about 4 years

[CUBSWILLWIN @ Jun 5th 2008 12:08PM]

I agree Mills. It'll probably be dead. It is a bit more secure than GSM, but GSM lets you easily switch phones, so there is no pain for a contract. The world mostly started with GSM anyways. One of the first users of CDMA were the army, and they didn't let anyone use it for a while when GSM was talking over.

[Zak @ Jun 5th 2008 12:13PM]

Jobs approached Verizon and every other major carrier with the iPhone concept when he was shopping it around. Verizon didn't want to make the changes to their infrastructure that he wanted, and they weren't willing to sell the iPhone on Jobs' terms, so they turned him down.

So please direct all complaints about the iPhone not being available through Verizon to Verizon's CEO, who I'm sure has been kicking himself pretty hard for a while now.

[Michael Scrip @ Jun 5th 2008 12:43PM]

Verizon-atel should do something. They are now the largest carrier without the iPhone.

Last week AT&T was the largest carrier, WITH the iPhone.

How much longer will Verizon be CDMA anyway?

[Khaytsus @ Jun 5th 2008 12:50PM]

Hello, the World Fanboiz called, they wanted their iPhone. GSM is a world standard, CDMA is not.

[CraigJ @ Jun 5th 2008 1:14PM]

Yeah, because the iPhone is a US only product, and the majority of the world is CDMA.

[matt @ Jun 5th 2008 1:25PM]

The 3G iPhone will be CDMA, albeit WCDMA, and not CDMA2000.

(CDMA is not a 'dead technology' seeing as GSM has adopted CDMA for 3G. Also, Verizon will be using GSM's CDMA-based LTE technology for 4G instead of Qualcomm's OFDMA-based UMB technology, so long live CDMA!)

[Rogue_Genius @ Jun 5th 2008 1:29PM]

@ Zak, Thanks for the reply.

@ Flashpoint - Unfortunately, Zak is right. It wasn't an issue with Apple wanting AT@T/GSM, it was Apple selecting a company that would allow them to move forward with the vision Old Jobsy had in mind. As a 5 year VZW subscriber, I can attest to some of Verizon’s practices.

There is a good point somewhere down below; VZW and Alltel are the same type of network (for the most part) so it should be less painful than the Sprint/iDen debacle. And CDMA is limited to this part of the globe, just about EVERYONE else uses GSM. Why should Apple go after the smaller (read 67 million CDMA subscriber) market when you could have the biggest US wireless market (pushing 70 mil on AT&T) PLUS all the other markets around the world. Anyone else notice the litany of companies signed up to distribute the iPhone (presumably once it hits 3G)? I think that if anything, they would have gone CDMA for the first version and then dropped a GSM/3G version right about now.

But can you imagine the backlash that would have occurred if Verizon had ended up with the iPhone but went about crippling some/all of the features that people love so dearly about it? Would the iPhone have been received so well if:

-The BT was crippled and unable to allow OBex transfers? (OBex transfers are notoriously disabled on VZW units, and the iPhone doesn’t allow that either)
- The iPhone wasn’t authorized for phone-as-modem usage? (Actually, it doesn’t do that either. Would anyone want to with the current iPhone doing EDGE speeds??)

Wait, huh? What was my point again? Damn, I guess there isn’t much difference in the way things panned out with the GSM iPhone vs a CDMA Verizon iteration. So would the iPhone have been as well received on Verizon? In a word: yes. It was all the marketing.

[john @ Jun 5th 2008 1:39PM]

Matt: WCDMA is not the same thing as CDMA. It makes use of similar _principles_, but to say that "GSM have adopted CDMA" is a profound and fundamental misunderstanding about what WCDMA is.

[Mills @ Jun 5th 2008 2:02PM]

@matt: you sir, are wrong. LTE is the evolution of the GSM frequency and has no basis whatsoever in CDMA. and you are not just a little wrong in your statement, you are completely backwards. CDMA markets are the one making the switch to GSM (or LTE.) you should really do some reading around before you start talking like you know everything.

and yes, CDMA is a dead technology

[Jay @ Jun 5th 2008 2:30PM]

Why must the iPhone be brought up in every not-even-apple-related post

[matt @ Jun 5th 2008 2:40PM]

CDMA is a general type of multiple access scheme, not a specific technology. Verizon/Sprint uses a technology that implements it called 'CDMA2000' and 3G GSM uses an implementation called 'WCDMA'. It's like how a 'motor vehicle' is a general type of transportation where 'car', 'truck', and 'motorcycle' are implementations of that type.

And LTE has nothing to do with an evolution of GSM frequencies, it is merely an evolution of technologies under the GSM umbrella. You will undoubtedly see LTE use some of that 700 MHz (aka not historically GSM) spectrum. You are right though, LTE uses an OFDMA scheme (as it should, OFDMA has a much higher spectral efficiency) and not CDMA. I don't know why I thought it was CDMA.

In any case, CDMA is still not a 'dead technology' as it's really not a technology at all. It is used in many other wireless technologies aside from mobile phones.

[m1D4W6 @ Jun 5th 2008 3:08PM]

Apple was working with Verizon to put out the iPhone as early as the late 90's, but Verizon didn't want to give creative control to Apple for the price plans, phone pricing, etc., so Apple went to AT&T and made a deal.

Plus CDMA is an outdated technology. EV-DO is fast (and has a future), but Verizon/Alltel have to worry about switching their network over to GSM to be able to work with the rest of the world. Their network now is similar to how the United States uses feet and miles instead of meters and kilmeters like the rest of the world. If the iPhone had come out on a CDMA network it would have been a waste of time because they still would have had to make a GSM for all the other countries, so going through AT&T made sense. Plus if you actually go into an AT&T or Apple store and try out the iPhone yourself, instead of jumping on the "it's slow on edge" bandwagon, you'd see that it's actually faster or equal in page loading time to a lot of the Verizon phones on EV-DO.

I think this merger will benefit Verizon by giving it the good customer service Alltel has focused and built it's business on, while helping Alltel because obviously they move from number 5 to number 1.

I'm curious to see what will happen in the next year when T-Mobile gets their 3G network up and running... curious to see who's customers they're going to take... AT&T or Alltel/Verizon (Sprint loses theirs to everyone, so that'll be a given).

[MastrCake @ Jun 5th 2008 12:02PM]

Hey... Veritel was MY idea!!!!

http://www.engadget.com/2008/06/04/verizon-in-talks-to-buy-alltel-for-27-billion/comments/12478057/

[Stem $ell @ Jun 5th 2008 9:06PM]

And their new logo? "Can you hear me doubling your bill now?"

[CUBSWILLWIN @ Jun 5th 2008 12:05PM]

isn't it obvious. Verizon wants to take over mobile communications and make the the FCC and google cripple under its power. Let's hope this never happens.

[Killer @ Jun 5th 2008 2:33PM]

First off, Verizon is trying to gain more ground over AT&T. It's obvivious that AT&T is doing the same. They're corporations, they all have the same concept "screw the consumer". So stop acting like this is the world worst thing to happen to the industry. Trust me I get screwed over all the time it doesn't matter what company it is. I have Verizon as my cell phone, of course I don't mind this merger it bowds well for me. (Only reason I stay with Verizon are the major discounts I get, but I still don't like them.) I also have SBC as my landline, oh well I did until AT&T bought them after they were split up in 1992 for being a Monopoly. The strangest thing, I was 5 weeks from SBC installing DSL in my area, ever since AT&T completely took over its been 5 years and no DSL. No company is for the consumer so stop buying into the idea. Oh and second, sorry to say this but the FCC will approve of this:
2 Reasons:
1. Verizon bought the C Block of the 700mHZ spectrum, big money rollers for the FCC.
2. The FCC didn't and hasn't stopped AT&T from buying up the companies that were taking away from the company in 1992. (SBC, Bell South, and all the other "little bells".) I don't see why they would stop this transaction either.

[9bit @ Jun 5th 2008 12:11PM]

Wait, Alltel actually has customers?

[lookin4trouble @ Jun 5th 2008 12:17PM]

Of course they do ... if they didn't the MyCircle guy would be out of a job.

[riggs @ Jun 5th 2008 12:27PM]

come and get your loveeeee

[Chad @ Jun 5th 2008 12:58PM]

It's as if 13 million voices were heard in unison scream "OH SH*T!".

Seriously, Sprint bought Nextel for their customers and then lost those customers post hast by ignoring the Nextel brand in an attempt to get them to move to Sprint's network. Having used PTT on different platforms no one has achieved the ease of use utility of the iDen implementation. With Nextel there is virtually no lag between Push and Talk. With the others it's more like Push....wait for network to initialize...Talk then reverse the process. It is actually easier just to call someone than use their PTT.

Alltell customers are Alltell customers because it is open and if Verizon thinks it can implement it's draconian restrictions on this group without losing 30% or more of those customers it's crazy. It probably fully expects to lose the customers but their risk analyst figured out it was still a profitable endeavor so full steam ahead.

Let the carnage begin!

BTW
Chad needs to start looking for a new job.

[Warren @ Jun 5th 2008 1:16PM]

Where I work all of the company issued blackberrys and normal cell phones are on Alltel. Everyone who has one is now PISSED. Seems like everyone feels the same way: I bought an Alltel phone because I HATE Verizon.

[john @ Jun 5th 2008 12:17PM]

You can't really compare this to the Sprint-Nextel merger. Sprint and Nextel were on different wireless networks (CDMA and iDEN), and Nextel's specialized network had a feature that Sprint has had a ton of trouble duplicating ... but can't ignore because it was Nextel's key feature (their version of the push-to-talk concept). Between that and the emergency services contract(s), Sprint has 2 huge albatrosses around its neck in the Nextel acquisition.

Verizon-Alltel, on the other hand, is all one protocol (the CDMA family). It may be as simple for them as adding the Alltel customer base's ESN numbers to Verizon's database, and then making similar integrations for the Alltel field equipment. No real heavy lifting required, just timing of changes.

And, frankly, I think Sprint needs to be more worried about this than AT&T does. Sprint gave up their data plan advantage by adopting a 5GB monthly cap. Verizon beats them on just about any other level (except maybe pricing) ... and Verizon is now, or will soon, be accepting other CDMA carrier's phones onto their network ... making it easy for Sprint customers to jump ship.

[Striker @ Jun 5th 2008 12:23PM]

Can you spell "Monopoly"?

[Ryan Block @ Jun 5th 2008 12:24PM]

Not so. Alltel also has a very large legacy network for rural areas (AMPS), so there isn't complete unity there. And PTT for CDMA has been around a long time, so it wasn't about the features and unifying the network. Granted, they did do a poor job at that, but if you look at the financials of Sprint's business since the acquisition, it's painfully clear that their problems and the problems with that acquisition ran a LOT deeper than iDEN vs. CDMA.

[p3t3b2 @ Jun 5th 2008 1:11PM]

Sprint does NOT have a cap on their data, some of you guys need to get your facts straight. Go to their web site and show me where it says "5GB cap"?

Keep in mind I spoke with Exec services they said who ever put out that info (the cap rumor) is incorrect.

[john @ Jun 5th 2008 1:18PM]

p3*:

Go read the Howard Forums' Sprint section. The 5GB cap has been thoroughly discussed and _confirmed_. The exact nature of the cap (hard cap vs soft cap) might be debatable, but not the presence of a cap.

And if you send an email to the CEO about it, you'll get a reply (from his team) confirming it and rationalizing/justifying it, as well.

[p3t3b2 @ Jun 5th 2008 1:24PM]

Also, Sprint has the largest mobile broadband network, and when Wimax rolls out later this year what will Verizon have, LTE?... Which probably won't be available until late 2010... 2012. By that time most computers will be Wimax capable.

Wimax is currently available in 100 countries.

[p3t3b2 @ Jun 5th 2008 1:33PM]

Why would I reference a damn forum when I can speak to the horse?

There is no cap!!!

[john @ Jun 5th 2008 1:41PM]

Why read hofo? Because there's a much bigger crowd of people who have confirmed the cap, dealing with all different levels of the company, than your one anecdotal refutation of it. For example, I can raise your talk with Executive Services by my email from the CEO's office saying that, yes, the cap is coming, just as everyone has announced.

[p3t3b2 @ Jun 5th 2008 1:59PM]

Most cell phone customers don't even know about these forums? Let alone Sprint customers, so don't give me that bigger crowd BS. Forums don't represent anything, you're making yourself look ignorant. Once again, there is no CAP.

[Bumble @ Jun 5th 2008 2:07PM]

Correct, as of right now there is no cap. The policy change goes in effect June 15th. You might want who ever you talked to to go back and read the playbook from a couple weeks ago.

[john @ Jun 5th 2008 2:10PM]

"Sprint confirms it's implementing data usage caps"

http://www.betanews.com/article/Sprint_confirms_its_implementing_data_usage_caps/1211328858

And that was just the _first_ google result from "Sprint Confirms 5GB limit".

You're the one who is making themselves look ignorant. If you want to argue that it only applies to usb/card modems and phone-as-modem plans (sort of like AT&T's 5GB limit), fine. But the fact is, the limit is coming, no matter how much you're in denial about it.

[Striker @ Jun 5th 2008 12:21PM]

BREAKING: At&t Announces Plans to Acquire T-Mobile

As an At&t Mobility user, I can totally see that coming, hopefully.

[Mobius_1 @ Jun 5th 2008 12:32PM]

So that means no more legal trouble for Engadget mobile? The day of that merger will be marked as "Magenta day" then

[kjb434 @ Jun 5th 2008 12:37PM]

I guess you're an idiot that doesn't understand business.....

T-Mobile is owned by a German company called Duestche Telecom.

If T-Mobile was a money losing arm of the company, yes then i can see AT&T thinking about acquiring it. The reality is T-Mobile is actually solvent.

The smart move for AT&T is to just appeal to T-Mobile customers and convince them to switch. It's a lot less hassle this way.

[john @ Jun 5th 2008 1:10PM]

UGH... God I hope AT&T doesn't try to buy T-Mobile (or the "USA branch of D-T" as it were). Sure, AT&T has a great phone selection, but their plans and pricing sucks. The only exception is the 30 days of pre-paid unlimited data for $20.

[Striker @ Jun 5th 2008 3:53PM]

I was talking about the US branch, and I know it is owned by Deustche Telekom, and it was just a joke, but there is nothing money can't buy, especially since At&t is probably grinding their teeth because of this.

[Frankenstein Black @ Jun 5th 2008 12:23PM]

VerAlltell-you-how-we’re-gonna-gimp-your-phones? We won’t be impressed until this new entity (whatever its call) shows us how “open” it will be and makes the jump to a SIM based LTE service/network that will be compatible with the majority of other global networks. We all know that the other kids laughed at the giant Baby Huey playing in his CDMA sand box all ALONE!

[kjb434 @ Jun 5th 2008 12:40PM]

No name change will occur.

Alltel will just disappear and the customers will just be absorbed. When an Alltel contract run out, the customer will just have to get a Verizon one or leave.

If you want to upgrade your phone, you'll lose any Alltel aspects to your contract and become Verizon.

It's very simple. In about two years, there will be no evidence of Alltel.

[Pete @ Jun 5th 2008 12:28PM]

Take that Palm!

Highly rated coment. Everybody hates Palm!!!

[Adam P @ Jun 5th 2008 12:24PM]

No merger! What about all of Alltel's "friendly roaming"??? What if that disappears? It's all I've got going for me...

Verizon's coverage is spotty out here in the Wisconsin/Iowa area. Verizon locks their phones WAY down. The Verizon RAZR versus the Alltel RAZR is like a bank vault versus a cereal box -- in a bad way! I like being able to use bluetooth to transfer files. With Verizon, that's a no go on the most ubiquitous phone on the market.

Also, Verizon's subscriptions are more costly than Alltel. So, unless Verizon is paying $2100 per subscriber and decides, "We don't need to make this up in fees... let's just keep the lower Alltel prices" then this is a bad move for consumers.

Sprint/Nextel failed (are still failing), IMHO, largly due to the astronomical cost to the consumers. Cingular/AT&T kept prices competitive, ipso facto success.

What now?

[kim @ Jul 5th 2008 1:28PM]

Verizon may cost more but you don't pay for extra's like unlimited texting it is included in the price. For us verizon was far more cost effective and I couldn't wait to ditch alltel

[Jonathan @ Jun 5th 2008 12:27PM]

at $2,350 a subscriber, I think they could have called each of alltell's customers and offered them $1,175 to switch and they could have "bought" the company for half price.

[darkstar @ Jun 5th 2008 12:43PM]

hahah
i didnt even think of that!

kinda like how much the presidential candidates are spending $$$$. if only they had taken everyone out for lunch... they coulda saved a lot of money and get more votes that way too.

[Jonathan Keim @ Jun 5th 2008 1:52PM]

Where would they get the numbers? Plus, they would have to pay someone to manage it all, do the work, etc.

[conor @ Jun 5th 2008 3:06PM]

they are buying coverage too.

[Adam P @ Jun 5th 2008 12:27PM]

Then AT&T customers will have good phones and T-Mobile customers will have good service! That comment is based on pre-iPhone AT&T phones.

I should just stop typing.