Verizon Pushes for One More Mega-Merger with Alltel Buy

Alltel Subscribers, Execs
Another concern about the Verizon-Alltel combination is the effect on consumers. Verizon could alienate the Alltel base if it doesn’t play its cards right, said Ayvazian. Alltel has created a unique position by being “nimble and pesky,” he said, offering packages and features different from the larger carriers. Many a customer has chosen Alltel over the Big 4 for its emphasis on customers; Verizon, conversely, is network-centric, Ayvazian said.

“If Verizon’s smart, they’ll work to secure the Alltel subscribers before they complete the transaction,” he said.

There’s one big way to do that: spin off an MVNO of sorts — a separate brand riding the Verizon network. With 13 million people being forced to join the Verizon family, it makes sense for Verizon to “make up a new brand and create a bridge for them to become part of Verizon world,” said Ayvazian.

The MVNO could have characteristics — features, billing procedures or geographic coverage — that differ from the mainstream Verizon Wireless profile. It even could keep the Alltel name, Ayvazian said.

Another content-oriented approach to keeping the Alltel base is to bundle Verizon’s other services, including FiOS. Those would be more content-oriented.

He expects Verizon officials to include such approaches in presentations to regulators as a way to secure quicker approval.

In the meantime, Alltel executives are, like that white-bearded wizard, probably going to “disappear,” Ayvazian said. Layoffs also are sure to hit Alltel workers. “I expect there to be big cultural differences. I don’t expect much of the Alltel culture to survive.”

On the management side, leaders will get “nice parachutes,” while people on the operations side will remain until the networks are integrated, Ayvazian said. Indeed, after integration costs, Verizon expects to reduce capex and opex, with savings of $1 billion in the second year after closing.

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