Alltel Remnants To Disappear Soon

The remaining fragments of Alltel Corp. will no longer exist in early 2015 as the final pieces of the Arkansas-bred Fortune 500 wireless brand are merged into the nation’s largest wireless company, AT&T officials said on Monday.

“We are still in the process of transitioning former Alltel subscribers to the AT&T network,” AT&T spokeswoman Anita Smith told Talk Business & Politics. “To date we’ve transitioned customers in Idaho and part of Ohio to AT&T. In other areas, we’re making improvements to the network so that former Alltel customers will have a great experience on the AT&T network. We expect to transition more in the coming weeks.”

Altogether, Smith said AT&T has transitioned about 14,000 customers and is preparing to transition more in the near future. “We expect the transition to continue through the end of the year and into early 2015,” Smith said.

In addition to migrating former Alltel customers, AT&T is also in the process of rebranding Alltel retail and marketing assets to AT&T. Smith said that will continue along with the customer migration process into early next year.

“We typically will rebrand and launch advertising in a market shortly before we plan to migrate customers,” Smith said. “Once the migration is complete, we’ll completely rebrand to AT&T, including turning down the Alltel website.”

As of this week, Smith said there were about 560 out of 700 former Alltel employees working for AT&T following the Allied acquisition. At its peak, Alltel had more than 3,000 employees at its Little Rock headquarters and across the state. Alltel had about 15,000 total workers at the time of its merger with Verizon.

ALLTEL SELL-OFF BEGAN IN 2007 WITH $27 BILLION BUYOUT
After the AT&T customer branding and migration process is complete, it will have taken nearly seven years for the quirky Alltel brand to disappear after a private Wall Street buyout firm first announced in the summer of 2007 that it was buying the Arkansas wireless giant.

On the fateful day of May 20, 2007, Wall Street firms TPG Capital and GS Capital Partners announced they were acquiring all of the outstanding common stock of Alltel for $71.50 per share in cash, roughly $27.5 billion in cash.

At the time the deal closed in November 2007 and TPG took Alltel private, the Little Rock wireless giant was the owner and operator of the nation’s largest wireless network, had almost 13 million wireless customers and brought in revenues exceeding $9 billion annually.

“This transaction delivers substantial and certain value to our shareholders while providing the company with long-term partners who share our commitment to our customers, employees and the communities we serve,” Alltel CEO Scott Ford said at the time.

But not even eight months had passed in June 2008 when Verizon Wireless announced that it had reached an agreement with Alltel, TPG and its partners to acquire the Little Rock wireless giant in another big cash deal worth $28.1 billion.

When Verizon completed the purchase of Alltel in January 2009, the deal allowed the New Jersey-based wireless joint venture of Verizon Corp. and Europe-based Vodaphone Group to bypass AT&T as the largest U.S. wireless company with more than 83 million subscribers.

But to gain merger approval from the U.S. Department of Justice and the Federal Communications Commission, Verizon was required to divest nearly 2.1 million of those former Alltel customers for competitive reasons.

Those Alltel assets included overlapping Alltel and Verizon properties in 105 operating markets across 24 states, which became known as the Alltel Divestiture Markets. At the end of 2009, those assets and retail operations were worth more than $2.6 billion.

Less than six months later, Verizon Wireless announced that it had reached deals with AT&T and Atlantic Tele-Network, Inc. to sell the remaining parts of the divested Alltel markets. For its part of the deal, AT&T agreed to acquire 79 of the 105 Alltel Divestiture Markets for nearly $2.4 billion in cash.

A month later, Atlantic Tele-Network agreed to acquire the remaining 26 Alltel Divestiture Markets that were not included in the transaction with the AT&T deal for $200 million in cash. Both of those deals closed in the second half of 2010.

ALLIED WIRELESS TRIES TO KEEP ALLTEL BRAND ALIVE
Little known Salem, Mass.-based Atlantic Tele-Network continued to carry on the Alltel tradition by creating a new company called Allied Wireless, a nod to Alltel’s early beginnings as Allied Telephone when it was formed in 1983. Allied began with a splashy announcement at the State Capitol with Gov. Mike Beebe announcing that the state would give the company $5 million in incentives to remain in Little Rock.

The spunky Little Rock-based company, headed by former Alltel Chief Marketing Officer Frank O’Mara and several former Alltel lieutenants, operated quietly for three years without much fanfare until the beginning of 2013. By that time, the retail wireless business had nearly 600,000 customers in rural markets across Georgia, North Carolina, South Carolina, Illinois, Ohio and Idaho, operating under the Alltel brand.

But in January 2013, AT&T announced that it was snapping up the remaining Alltel assets for $780 million. That deal closed in September 2013 and AT&T immediately announced that it would begin upgrading the former Alltel network to 4G service with plans to move customers to the AT&T network by the second half of 2014.

Critics of Alltel’s seven-year long divestiture said the multiple deals defeated the purpose of the FCC and Justice Department’s original directive that Alltel’s assets should end up with a smaller wireless player to spur more competition.

The Rural Wireless Telecom Association, which represents rural wireless carriers across the U.S., recently said that the health of the entire mobile business was at risk following AT&T’s acquisition of Leap Wireless earlier this summer. The rural trade group also cited the auctions of Leap, Alltel and MetroPCS as prime examples of putting too much market share in the hands of the industry’s Big Four – Verizon, AT&T, Sprint and T-Mobile.

“(We) believe that the health of the entire mobile wireless industry hinges on the competitive presence of carriers of all sizes: from the four nationwide carriers to the various regional carriers down to the much smaller, but vital to competition, rural carriers,” the association said.

Since the Alltel merger, Verizon has continued to hold the top spot as the nation’s largest wireless carrier with nearly 103 million users, followed by AT&T with about 86.5 million, industry statistics show. However, at the end of the first quarter, both companies reported that they held 34% of the wireless market in the U.S.

Verizon also still maintains a major regional headquarters presence in Little Rock with the operation of one of the wireless giant’s top call centers at Alltel’s former home base on One Allied Drive. In 2012, the call center facility underwent a major $30 renovation and earlier this summer announced it was adding nearly 300 new employees to its payroll.

Little Rock is also home to many former Alltel employees currently working for Windstream Corp., which was originally the spin-off of Alltel’s wireline business. That spin-off occurred in 2005 and Windstream has since evolved into a wireline, broadband, business services and fiber optic network provider.

Editor’s note: Wes Brown, the author of this article, worked for Alltel from 2006 to 2011.