Alltel announces $455 million buyout of wireless partnerships in Carolinas

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Author: WildC@rd

Alltel Corp. announced it purchased the remaining 50 percent interests in 10 partnerships with Palmetto MobileNet, L.P. that it did not already own. The partnerships cover about two million potential customers in North and South Carolina.
Alltel did not disclose the value of the transaction, but CT Communications Inc. said Alltel paid $455 million in cash for the partnerships. CTC holds a 22.4 percent interest in Palmetto and said it will receive around $97 million from the sale.

The purchases give Alltel, which counts 10 million customers in 33 states, a better position as an acquisition target. Speculation about a potential Alltel suitor has focused on Verizon Wireless, particularly in light of AT&T Inc.'s planned acquisition of BellSouth Corp. that will wipeout the Cingular Wireless L.L.C. brand. Verizon Wireless may be tempted to embark on the acquisition while Cingular, its main competitor, is distracted by merger and consolidation issues.

However, Verizon Wireless' parent Verizon Communications Inc. is itself dealing with such issues as it digests MCI Inc.

Alltel and Verizon Wireless both operate CDMA-based networks that also use Qualcomm Inc.'s BREW platform, and the two have roaming agreements in place valid through 2010.

Last year, Alltel spun off its wireline business to become a pure-play wireless carrier, potentially simplifying any roll-up designs by Verizon.

Alltel bulked up last year when it acquired rural operator Western Wireless Corp. for approximately $6 billion, as well as more recently acquisitions of Midwest Wireless and First Cellular of Southern Illinois. However, the company's debt load continues to concern analysts.