The fifth largest wireless phone company in the country, Alltel, is being bought by Verizon Wireless. The deal, if approved by regulators, would easily make Verizon the largest wireless company in the country. There is little doubt that the deal will be approved. Verizon might have to sell off or give back some of the wireless spectrum that it will acquire that overlaps with areas it already operates within, but given the recent history of wireless mergers (Cingular-AT&T Wireless; Sprint-Nextel) and the approved acquisitions of other small wireless carriers (Dobson Communications, SunCom, Edge Wireless, and Rural Cellular) the deal will likely go through.
The question remains whether this transaction is really good for consumers. Verizon's network will expand a little, but Alltel has always seemed to be a bit of thorn in Verizon's side. Verizon even went so far as to sue Alltel over one of its commercials earlier this year. In addition, in some areas Verizon and Alltel were in direct competition with each other which will now be lost. Over 13 million people had reason to choose Alltel as their wireless carrier and now they lose that choice they made and become part of the Verizon network.
There is also some question as to what will happen to the CDMA network in this country. The three largest CDMA carriers are Verizon, Sprint, and Alltel respectively. By 2010, Verizon intends to use LTE (Long Term Evolution) technology on its 4G network. LTE is GSM based and the change will leave Sprint has the only major carrier on the CDMA network and Sprint's current future is open in the air with the rumors of potential mergers abound.
The Verizon-Alltel merger for some has been considered inevitable given Verizon's past attempts to acquire the company and the technology compatibility. The problem is where will this trend take us, there appears to be no room for a fifth major competitor in the wireless phone industry and considering the rumors of a T-Mobile-Sprint merger, how long before the market is only big enough for 3 major carriers in this US.