Apr 30, 2009 (11:04 AM EDT)
Verizon Seeks Extension For Alltel Spinoff
Read the Original Article at InformationWeek
Verizon Wireless is seeking some more time to divest wireless assets it acquired when it purchased Alltel.
By purchasing the majority of Alltel for $28.1 billion last year, Verizon became the largest U.S. carrier, with about 80 million subscribers. Government agencies approved the deal with the requirement that Verizon divest in certain markets where its wireless assets overlapped.
The company's deadline was originally May 9, but Verizon has asked for an additional 60 days to complete the process.
"Although the company has diligently managed the divestiture process, the sheer size and complexity of the divestiture coupled with the current economic conditions have forced bidders to conduct far more due diligence than usual," Verizon said in an official filing. "This has made it impossible to complete the divestitures within the initial 120-day period."
Alltel is not finished as an independent carrier, though, as it will continue to provide wireless services to about 2.2 million customers in 22 states. It continues to grab new cell phones and smartphones, and it recently picked up the clamshell BlackBerry Pearl Flip.
With about 80% of U.S. customers already having cell phone service, the carriers are finding it increasingly tough to have organic subscriber growth. This may lead to more acquisitions, as the Alltel deal was a key factor in Verizon's strong first-quarter results because it added more than 13 million new subscribers.
Many are expecting U.S. Cellular to be the next major acquisition, as it has more than 6 million customers and is reportedly facing pressure to sell. Because it uses the CDMA technology for its network infrastructure, it could be an attractive target for Sprint Nextel or Verizon Wireless.