Alltel Buyout Could Trigger Additional Wireless Acquisitions

Telecom News Editorials Reports Glossary

Alltel Buyout Could Trigger Additional Wireless Acquisitions

6:30 am on May 23, 2007 | Category: Business, Wireless, Corporate

The $27.5 billion acquisition of America’s fifth largest wireless provider, Alltel Corp., by two private equity firms, has given rise to speculation that other regional cell phone carriers could be purchased in a similar manner.

The Alltel buyout “was unique in some regard in that they put themselves up for sale,” according to Credit Suisse analyst, Christopher Larsen, but “that doesn’t mean somebody else couldn’t come along and put themselves up for sale.”

Mid-sized rural carriers like Dobson Communications Corp., States Cellular Corp., Centennial Communications Corp., and Rural Cellular Corp. are among the potential candidates for another private equity purchase, according to Larsen. A buyout of nationwide carrier, Sprint Nextel, is less likely, but possible, he said.

Sprint Nextel is currently the third largest cell phone provider in America, and “redefines large” for private equity buyers, according to Larsen. It has run into some bad fortune in recent months, however, falling further and further behind leading competitors like Verizon Wireless and AT&T.

“Sprint may be a target if they’re not successful in turning around their operations,” commented Christopher Watts, an analyst with the London-based Atlantic Equities LLP.