AT&T Is Acquiring Regional Carrier Alltel

AT&T is buying Alltel, a small wireless carrier that offers service in a handful of states, mostly in the South and Midwest.

AT&T is going to pay $780 million in cash, for Alltel's 585,000 subscribers, retail stores and, most importantly, its wireless spectrum in the 700 MHz, 850 MHz, and 1900 MHz bands. Today's announcement makes it clear that acquiring Alltel's Wireless Network is AT&T main goal.

This network covers approximately 4.6 million people in primarily rural areas in six states: Georgia, Idaho, Illinois, North Carolina, Ohio, and South Carolina. AT&T's own Wireless Network is concentrated in urban areas, and this new spectrum will increase its footprint.

Alltel uses the CDMA standard for voice service, while AT&T uses GSM. AT&T will start the process of converting Alltel's network to CDMA, once the Federal Communications Commission and the Department of Justice approve this acquisition.

Of course, that's assuming the FCC and DoJ actually approve the deal. The DoJ shot down AT&T's attempt to buy T-Mobile because it felt the second largest carrier buying the fourth largest would be anti-competetive. It remains to be seen how these agencies will view AT&T acquiring a much smaller rival.