Alltel, Covad Expanding Networks, Seeking Independence
Alltel and Covad Mon. announced acquisitions aimed at cutting their dependence on Bells and major wireless carriers. Alltel will buy southern Ill. provider First Cellular. Covad closed on a purchase of West Coast provider NextWeb. The moves expand the firms’ footprints and network capabilities.
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Alltel’s all-cash deal brings the carrier into Ill. for the first time. Alltel assumes control of a First Cellular network covering 485,000 subscribers in 24 counties. First Cellular’s network includes major transportation lines between St. Louis, Chicago, Indianapolis, Evansville and Louisville, Alltel said, which will “complement its growing presence” in the Midwest. Detailed terms weren’t disclosed, but Alltel said it will get First Cellular’s spectrum licenses for the 24 counties, which analysts at UBS said include a 1.9 GHz PCS license and two 850 MHz licenses. In the 850 MHz band the small carrier mainly competed against Verizon Wireless, though Sprint Nextel, Cingular, T-Mobile and even U.S. Cellular have presences.
Alltel customers in Ia. and Mont. will benefit most from the new spectrum band, UBS said. They most likely will gain from Alltel-based roaming at 850 MHz in a neighboring state. An Alltel spokesman said First Cingular, as a CDMA carrier with contiguous territory, is a “perfect fit,” and Alltel will “take a serious look” at “wrapping up” similar small, rural carriers soon.
Meanwhile, Covad closed its acquisition of NextWeb, a broadband wireless carrier active in Cal. and Nev. Covad CEO Charles Hoffman sad “with this acquisition, we complement our existing network footprint, can provide higher bandwidth products to our customers, can provision customers more quickly, and ultimately own the ‘last mile’ and further reduce our dependency on the ILECs.”
The deal reduces Covad’s dependence on Bells, a spokesman for Covad said. Because NextWeb delivers up to 100 Mbps, the arrangement will greatly increase overall bandwidth, he said, adding new customers will now be Covad- ready faster -- as quickly as 72 hours. He said the wireless Covad could be very effective short term for uses like conferences. The spokesman said the move will help free Covad from dependence on the Bells because a single WiMAX station can serve an area 6 times as wide as a DSLAM and 3 times as wide as a T1.