Monday, December 12, 2005

Potential Buyers Seen Unlikely To Step Up For Alltel

Cellular-News writes that Alltel might have a hard time finding suitors for its wireless business after spinning "off its wireline business and merge it with Irving, Texas-based Valor Communications Group Inc. in a deal worth $9.1 billion."

Roger Entner at Ovum said, "Alltel is one of those companies that will show up every year on (Verizon Wireless Chief Executive) Danny Strigl's Christmas list, bBut it always depends on the price tag."

In theory, Alltel would be a good fit for Verizon since they both run CDMA networks and Verizon could fill coverage gaps in "rural areas that Alltel specializes in." However Alltel could be too costly. Entner estimated Alltel's "wireless assets to be worth roughly $16 billion, and could be sold at a premium as high as $20 billion."

William Power at Robert W. Baird & Co said, "At the right valuation, it could be a nice fit, but it's not something I'm banking on, especially in the near term."