Alltel's $4.4 billion acquisition of Bellevue-based Western Wireless was cleared yesterday by U.S. antitrust enforcers on condition that...
Alltel’s $4.4 billion acquisition of Bellevue-based Western Wireless was cleared yesterday by U.S. antitrust enforcers on condition that Alltel sell wireless-telephone assets in 16 rural markets across three states.
The purchase, still subject to Federal Communications Commission approval, would help Alltel gain 1.4 million customers in 19 states, including California. Western Wireless also owns the Cellular One brand, which Alltel said it agreed to sell.
Alltel, the sixth-largest U.S. mobile-telephone company, agreed to sell Western Wireless’ mobile-wireless operations in Kansas, Nebraska and Arkansas where the two companies are “each other’s most significant competitors,” the Justice Department said in a statement yesterday.
“The required divestitures will preserve competition, in particular for residents of rural areas, who often have fewer choices for wireless telephone services,” J. Bruce McDonald, a deputy assistant attorney general for antitrust, said in the statement.
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Alltel, based in Little Rock, Ark., serves 8.8 million wireless-telephone customers and provides roaming and other wireless services to other mobile-telephone services in 24 states. It also provides local telephone service to 3 million rural customers in 15 states.
Western Wireless serves 1.4 million U.S. mobile-wireless customers and provides roaming and other services in 19 states. Its Western Wireless International unit provides telephone and communication services in seven countries.
Alltel announced in January it would buy the Bellevue company. In a statement yesterday, Alltel said it planned to complete the transaction “later this summer” after it obtains approval from the FCC.
Western Wireless shareholders are to vote on the proposed deal July 29.
Under the agreement with the Justice Department, which is subject to the approval of a federal judge, Alltel said it would sell the Cellular One wireless brand, which Western Wireless used to market mobile-telephone service. Alltel “has no use for the brand” and whoever purchases the wireless assets will need the Cellular One name on its products to remain an effective competitor in the 16 markets, the government said.
Alltel was allowed to keep Western Wireless facilities that provide roaming services for wireless telephones that use the Global System for Mobile, or GSM, technology in these markets, the Justice Department said.
The Alltel deal follows Cingular Wireless’ recent $41 billion purchase of Redmond-based AT&T Wireless and Sprint’s agreement to acquire Nextel Communications for almost $35 billion.
Mobile operators in the fiercely competitive U.S. market are combining to cut costs and boost marketing clout amid falling call prices and a declining number of potential first-time wireless customers.
The deal with Western Wireless would push Alltel to the No. 5 slot among U.S. wireless carriers and would also give Alltel an international presence.
Information from The Associated Press and Reuters is included in this report.