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Alltel

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Alltel Corporation
Company typePublic (NYSE: AT)
IndustryCommunications Services
Founded1983
HeadquartersLittle Rock, Arkansas, USA
Key people
Scott T. Ford, President & CEO
ProductsTelecommunications
RevenueIncrease$7.9 billion USD (2006)
Increase$842 million USD (2006)
Number of employees
15,000+ (2006)
Websitewww.alltel.com

Alltel (NYSE: AT) is an American telecommunications company with headquarters in Little Rock, Arkansas. Alltel provides wireless services to residential and business customers in 35 states. States not served by Alltel include Alaska, Delaware, Hawaii, Indiana, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Washington, D.C.

Company

With a market cap of $24.79 billion and over 15 million customers as of early 2006, Alltel is the largest regional mobile phone company in America, and the fifth largest mobile phone company overall. The wireless group provides service in parts of 35 states. The company mainly focuses on small to medium-sized cities, but has low-cost roaming agreements with the major national CDMA carriers, especially Verizon Wireless and Sprint-Nextel, in order to provide national service. Reciprocal agreements in turn provide those carriers with coverage in rural areas. When Alltel acquired Western Wireless in 2005, it gained a large GSM footprint as well. While it does not offer GSM service to its own customers, Alltel has indicated that it will continue to maintain the GSM footprint (and perhaps even expand it) to provide roaming service to GSM users of other wireless carriers; however, one exception is that as of April 1, 2007, Alltel will no longer maintain the GSM footprint in the coverage area it acquired from First Cellular of Southern Illinois. It does, however, offer current GSM customers in the affected area to sign a new agreement with Alltel, requiring affected customers to purchase a new CDMA phone. Alltel advertises itself as "owner and operator of the nation's largest wireless network"; this claim refers to geographical coverage of its network rather than number of Alltel customers or population covered.

File:AlltelOldLogo.jpg
Alltel's old logo (prior to 2006).

In 2006, Alltel added 640,000 net customers through internal growth, an 87 percent increase. Post-pay churn was 1.57 percent and total churn was 2 percent, both improved from the previous year. The company also acquired more than 500,000 customers through the purchases of Midwest Wireless, First Cellular of Southern Illinois, Virginia Cellular and Cellular One in Amarillo, Texas.

Executive team

History

In 1943, Allied Telephone Co., a small business specializing in installing telephone poles and cabling for telephone companies across Arkansas, was founded by Charles Miller and Hugh Willbourn, Jr.

Alltel's modern history begins in 1983 when Allied Telephone and Mid-Continent Telephone, founded by Weldon W. Case and his younger brother, Nelson H., merged. The elder Case became Alltel's first chairman, based in Hudson, Ohio, where Alltel was first headquartered. In 1985, Alltel launched its first wireless system in Charlotte, North Carolina and by 1993 Alltel had opened its first wireless retail store. Alltel was named to the S&P 500 Index in 1994. Since 1995, the Jacksonville Jaguars have played at Alltel Stadium. By 1996 long-distance service was offered and in 1997 the company's wireless and wireline businesses converged into a single organization.

On December 9, 2005, Alltel announced that it would become a wireless-only company, simultaneously merging and building a spin-off company for its wireline services. [1] This company would then be merged with Valor Telecom, which on April 10, 2006 announced it will take the name Windstream Communications. The merger-spinoff process ended July 17, 2006, when Windstream began operations.[2]

On May 20, 2007, Alltel announced an agreement to be sold to two private-equity firms TPG Capital and GS Capital Partners. Under the deal, the two firms will pay $71.50 a share in cash, or 27.5 billion, a 10% premium over Alltel's May 18, 2007, closing price.

Network technology

Alltel networks consist of analog and digital systems operating primarily on the 800 MHz cellular band, much like Verizon Wireless. Alltel has recently added a few 1900 MHz PCS sites in various places, such as Jacksonville, Florida and Wichita, Kansas for greater system capacity. Native Alltel markets consist of both analog (AMPS) and digital (CDMA) technologies. Select markets have been outfitted with 3G 1xEV-DO digital technology, which allows for additional battery life and faster download times when using Internet or BREW-based applications. AMPS is still in place and in use in most places, but the company acknowledges that it is aggressively converting analog customers to digital technology. In 2005, an Alltel spokesman stated that only 15% of its customer base still uses analog. Alltel has yet to release official plans in response to the FCC decision stating that by March 1, 2008 A and B side carriers are no longer required to support analog.

Roaming partners

To further extend service to its customers, Alltel uses roaming agreements with competing providers to provide reliable coast-to-coast service. Roaming agreements in the US are primarily with Verizon Wireless and Sprint Nextel, but other arrangements are in place with U.S. Cellular, Cingular/The New AT&T (mostly for AMPS), Unicel, and other CDMA wireless providers. They also have agreements with most Canadian cellular providers, such as Telus and Bell Mobility. Since many of these roaming partners operate in the 800 MHz or 1900 MHz CDMA band, Alltel customers on national calling plans are required to use tri-mode (800 AMPS, 800 CDMA, 1900 CDMA) or dual band (800 CDMA, 1900 CDMA) handsets.

On May 9, 2006 Alltel and Sprint Nextel agreed on a new nationwide roaming partnership. (Press releases: Alltel; Sprint) Unlike Alltel's voice and 1xRTT roaming agreement with Verizon Wireless, the new reciprocal roaming agreement is for both voice and 1xEV-DO data roaming coverage. This agreement gives Alltel customers access to Sprint's voice, 1xRTT, and 1xEV-DO networks and gives Sprint customers access to Alltel's denser rural 1xEV-DO voice and data coverage. This agreement is the first of its kind between wireless carriers in the United States.

Network coverage

There is currently Alltel-owned and operated network in 35 states; Alltel currently has roaming agreements in place to provide coverage in all 50 states including Puerto Rico and the U.S. Virgin Islands. Alltel also has agreements with cellular providers in Canada. Alltel's free night minutes start at 9:00pm, unless upgraded to a 7:00pm nights plan or add-on.

Alltel also now offers coverage plans for all of North America, the "North American Freedom" plans. With roaming agreements in Mexico and Canada. Note that "My Circle" and "Mobile to Mobile" calling only applies within the United States. Outside of the US it is considered part of the anytime minutes in a plan.

File:Uswlssmap.jpg
Alltel owned-and-operated spectrum license map (as of October 2006)

Handset and technical specifics

Commercials

Alltel is the first cell phone company to make fun of other major companies. It started out when Alltel used lookalikes of rival cell phone companies' primary advertising characters. After a little bit of trouble, they placed a message at the beginning of these commercials saying "THESE ARE LOOKALIKES". After that, Alltel started a series of commercials involving Chad, Alltel's spokesman, bragging about Alltel's great service. There are four competitors that they parody in the commercial: Verizon, Cingular, T-Mobile, and Sprint. It should be noted that the man that plays the Cingular guy, Scott Halberstadt, plays Eric on Nickelodeon's hit show Drake and Josh.

New services

AskMeNow
On March 1, 2007 Alltel announced that they were the first U.S. carrier to offer AskMeNow across all handsets. The partnership provides customers, including those with smart phones, immediate access to the AskMeNow question-answer service.

My Circle
On April 21, 2006 Alltel launched a unique program called "My Circle". My Circle is a free and optional feature for customers that subscribe to National/Greater Freedom calling plans starting at $59.99 and sign up for online account access. (Numbers can only be added and modified through the Alltel website.) A customer selects a maximum of 10 numbers on other U.S. landline and wireless networks that they can call and not use up airtime or pay additional charges. 900 numbers, directory assistance services, and a customer's own number or voice-mail access number are prohibited in My Circle. These calls must originate and end within the customer's calling area.

The promotional campaign features this notice on television and the website: "Our lawyers would like to inform you some of the characters you see here are not associated with Alltel. They are look-alikes. The characters, not our lawyers." The first commercial has an Alltel representative named Chad welcoming the spokespeople of the other Top 5 wireless carriers (Verizon's "can you hear me now?" guy, a man who looks like Sprint's old "trenchcoat" pitchman, "Jack," the animated Cingular figure and a Catherine Zeta-Jones look-alike) to his circle. It takes place at an Alltel store. A second commercial takes place at a bowling alley. The third commercial takes place in a court room, with the faces of the other carriers blurred. The campaign even goes so far to include a MySpace page. The fourth and fifth commercials features employees of other carriers' mall stores trying to convince Chad to end My Circle with $8.00. The sixth has Chad giving RAZR's as Christmas gifts to them. Since this service and advertising campaign started, other carriers started adding similar services: For example, T-Mobile introduced "My Faves" in the fall of 2006.

U Prepaid
On January 30, 2005 Alltel introduced a new prepaid service called 'U Prepaid'[3]. U Prepaid is very much similar to other prepaid services like Boost Mobile, Virgin Mobile or AT&T GoPhone. Features that make U Prepaid unique are that it allows the customer to customize their plan with text messaging and unlimited calls to a certain number (extra charge required). U Prepaid allows roaming on Sprint, Verizon, US Cellular, and a few other networks.

Mergers and acquisitions

1998

  • 360 Communications (Illinois) - wireless properties and assets, merger adds 2.6 million customers in 15 states

1999

  • Standard Group, Inc. (Cornelia, Georgia) - merger adds more than 71,000 local telephone lines
  • Aliant Communications (Lincoln, Nebraska) - $1.8 billion merger
  • Liberty Cellular (Kansas) - $600 million merger

2000

2002

2003

2005

2006

  • First Cellular of Southern Illinois (Illinois) - Alltel purchased First Cellular for $14-15 million in cash.
  • Palmetto MobileNet, L.P. (North Carolina) (South Carolina) - Alltel has purchased from Palmetto MobileNet, L.P., wireless partnerships that cover approximately 2 million people in North and South Carolina. Alltel already managed and owned 50 percent of each of the 10 partnerships and has purchased the remaining interests from Palmetto. The partnerships include 34 counties across South Carolina and seven counties in Western North Carolina.
  • Alltel completes purchase of Midwest Wireless
  • In Summer 2006 Alltel's Simple Freedom Wireless, customers were migrated in non-Alltel markets. (see article below)

2007

Western Wireless

On January 10, 2005, Alltel announced it would buy Western Wireless (primary operator of the Cellular One brand name) for $6 billion in a stock-and-cash transaction. The deal would bring in an additional 1.4 million domestic wireless customers bringing the company's total wireless customer base to 10 million in 33 states, making Alltel the fifth-largest wireless operator in the United States. The merger would also bring an additional 1.6 million international customers from Western Wireless' overseas wireless ventures. These ventures, however, are being sold. Since both companies operate on CDMA technology, no major network integration issues were expected. According to Alltel CEO Scott Ford, "probably much less than 10 percent" of Western Wireless' 4,000 workers would face job cuts. The merger closed in August 2005; the Cellular One brand name was sold to Dobson Cellular in December 2005.

Simple Freedom

Simple Freedom Wireless is a prepaid wireless provider. The service is sold at Wal-Mart and some Sam's club stores. Some Simple Freedom customers in non-Alltel markets were migrated to Verizon Wireless prepay accounts in Summer 2006.

Sponsorships

NASCAR

  • Alltel is the primary sponsor of the #12 Dodge Charger driven by Ryan Newman in the NASCAR NEXTEL Cup series. [5]
    • This sponsorship was signed in 2000 under a contract between Alltel and Penske Racing. Greg Penske had joined the Board of Directors of Alltel and recommended the team switch from Herzog Racing to Penske Racing. On June 19, 2003, Alltel was banned from NASCAR sponsorship at the top level, but this current deal is grandfathered. The firm may not change names, nor may they switch teams under agreement of this grandfather clause.

Pro Fishing

  • Alltel has sponsored professional fisherman Scott Rook during the 2006 CITGO Bassmaster Tournament Trail.

Structure naming rights

References

  1. ^ Nystedt, Dan (2007-05-21). "Mobile provider Alltel agrees to $27.5B buyout". Computerworld. Retrieved 2007-05-21. {{cite news}}: Check date values in: |date= (help)
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