Wireless rivalry may intensify as Verizon bids to buy Alltel

NEW YORK -- "Outside the top 100 markets, competition will increase," he predicts. That could result in better deals and more choices for consumers, Entner says.

As expected, Verizon on Thursday announced plans to acquire Alltel in a deal valued at $28.1 billion. Verizon plans to pay $5.9 billion in cash and assume $22.2 billion in debt.

Alltel is owned by TPG Capital and GS Capital Partners of Goldman Sachs. The firms purchased the No. 5 wireless carrier in November for $27.5 billion. Alltel is not publicly traded.

Subject to regulatory approvals, the transaction is expected to close by the end of the year.

Assuming there are no snags and the deal goes forward, Verizon would leapfrog AT&T to become the largest wireless carrier in the country. AT&T has around 71 million subscribers; Verizon has 67 million.

Charles Golvin, a wireless analyst at Forrester, says he expects the Alltel name to vanish once the deal closes.

"Verizon Wireless is a powerful brand," says Golvin. "So they'll probably dump it pretty quickly."

Verizon Wireless doesn't disagree. "That's likely, yes," says spokesman Jim Gerace.

Another thing that might be going away: Alltel's popular "My Circle" calling plan.

The plan offers unlimited wireless calling to and from any five, 10 or 20 numbers in the USA, wireless or landline. Monthly fees start at $49.99.

Since most consumers don't call more than a dozen numbers regularly, "it's a de facto unlimited calling plan," Entner says — one reason it's so popular.