Verizon Wireless buy Alltel in $28.1 billion deal by Ivana Macakova

On Thursday Verizon Wireless announced they planned to buy Alltel Corp, the mobile phone service provider. They would obtain the equity for $5,9 billion. Next $22,2 billion they take in debt. By this step Verizon would overtake the largest U.S.player on a market, AT&T. Closing the deal is planning for the end of the year 2008.Alltel has the coverage in 35 states and is an alternative to 4 four carriers: Verizon Wireless, AT&T Inc., Sprint Nextel Corp. and T-Mobile USA.The deal between these two companies would bring earnings to Verizon Wireless more than 10 cents a share in the 1st year after contract. This estimation rose the shares of two companies which own Verizon Wireless. For Verizon Communications who own the majority of shares rose 6%, and shares of Britain`s Vodafone Group Plc rose 3,8%. The reason of the deal could be also the reducing competition in areas where both companies provide services.After negotiating the deal Verizon suppose savings of $1 billion in the second year after it.After buying the Alltel Corp, companies will have together about 80 million customers. Actual U.S.leader AT&T has about 71 million. Verizon would also reach 57 primary rural markets where Alltel operates.The analysts said the deal is a good step though it would represent less choice for the customers. Because Verizon and AT&T would control the market and No.3 in U.S mobile service Sprint Nextel Corp would suffer from poor customer.Some professionals think the deal to buy Alltel Corp. means a better range of choices for customers, some think that they will lost. Other result of the deal would be reducing competition between Alltel and Verizon

related story: http://news.wired.com/dynamic/stories/V/VERIZON_WIRELESS_ALLTEL?SITE=WIRE&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2008-06-05-07-43-05

by Ivana Macakova for PocketNews (http://pocketnews.tv)

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