Verizon to buy Alltel

Alright folks; it’s official. Verizon Wireless has stated that it will buy Alltel for $28.1 billion. Verizon has made a deal according to which it will pay $5.9 billion to Alltel to acquire its equity and assume a whopping $22.2 billion of its debt.

This acquisition will make Verizon Wireless the biggest cellular operator in the U.S. Verizon has 66.8 million subscribers now and by acquiring Alltel, it will add another 13.2 million to its subscriber base, thereby making it 80 million subscribers in total. The current number one operator, AT&T, has around 72 million subscribers.

An interesting aspect to this deal is, Alltel is probably the only company in the corporate history of America to have changed ownership so quickly. Last year, Alltel was acquired by the Texas Pacific Group and the private equity arm of Goldman Sachs for a similar price. This year, it has been acquired by Verizon.

Expectedly, this news has not made a big splash in the market as everyone and his mom knew that this was on the cards. This acquisition tale has been going on for years now and finally, it is official. If you remember, Verizon was actually keen to acquire Alltel last year, but Vodafone, its wireless partner, rejected the deal. But then, Verizon has managed to get what it wanted.

I think this is a perfect set up for Verizon for two reasons. First, both Alltel and Verizon use the same technology – CDMA. Second, Alltel has a good subscriber base in areas which are not covered by Verizon currently. So, it will extend Verizon’s network coverage platform. What do you think?

Categories: All things mobile phones.

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Mobile phones in India to come preloaded with ads?

With a mobile user base of around 250 million and growing, India continues to be the hottest market for mobile phone manufacturers. However, the rates of mobile phones have gone down sharply over the years. There are two main reasons for this.

First, the target customer segment of mobile phone manufacturers as far as India is concerned is the middle class people. According to surveys, the number of middle class people in India is estimated close to 300 million. In order to target this segment, mobile phone manufacturers have introduced new models which cost very little. And since the middle class also happens to be the most active customer segment in India, the low-priced models usually sell well, leaving the mobile manufacturers with no option but to continue with them.

Second, there is hellacious competition in the market. Both CDMA and GSM phone manufacturers are hell bent on capturing the biggest market share and as a result, they’ve cut down their prices sharply.

As a result, you can now get a mobile phone for just over $20 in India. Due to this reason, mobile phone manufacturers are looking for different ways to make money. One such way is mobile phone advertising.

Already, Nokia is planning to generate revenue through its mobile internet platform Ovi. Also, some of the mobile phone manufacturers in India are in talks with UK based mobile media firm Affle.

Especially, Affle’s SMS2.0, a mobile application, seems to have caught a lot of attention. This application adds a lot of new features like color, graphics, signature, and emoticons to an otherwise ordinary text messaging service. When the customer sends a text message using this application, there will be an ad at the bottom of the message and a full-screen ad while the message is being sent. Affle is also planning to add features like social networking and mobile search to this application.

Some of the big names in India including Airtel are interested in this technology and might soon incorporate it in their handsets. There are plans of releasing handsets which will have this application preinstalled. However, mobile manufactures might want to test the waters and see the user response for such handsets before taking any major decision.

Categories: Cell Phone Advertising, All things mobile phones.

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