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Review of the New Alltel Wireless
We have been asked to review what Alltel
Wireless, should look like after the acquisition
by Atlantic Tele-Network. The following is
our speculation based on what is known about ATN, the Alltel network, and our reasoning.
Map of ATN and Commnet Properties.
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The new Alltel will have a very good cellular-band (850
MHz) network that has been upgraded by the
old Alltel, most of which is 3G. They can
also expand their coverage into Commnet Wireless
areas.
Our Reasoning: Alltel already has very good coverage and
these parts of the network are well built
out. The ATN subsidiary, Commnet Wireless,
has spectrum in various parts of the country
that can be added to an ATN network. |
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The new Alltel will have reasonable prices and generous
plans. Based on their low level of debt,
they can undercut the prices of competitors.
Also, regional carriers have had great success
with less-expensive Unlimited plans and ATN should adopt at least a Local
Unlimited calling plan. They might be able
to secure roaming agreements with the major
Unlimited carriers for service in major markets.
We expect "My Circle" to live on.
Our Reasoning: Alltel already had some of the best plans
in the industry and ATN would be smart to keep them, leaving customers
with either better or the same as they have
today, and add a few more, to give the customer
more value for the money. |
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Alltel will probably stay with CDMA service and
phones allowing Alltel customers to continue
using their current phones. We assume ATN
will add GSM roaming capabilities to each
of their sites which could eventually allow
Alltel customers to select either technology depending
on the phone model they prefer.
Our Reasoning: Alltel leaves a properly functioning CDMA
network. Some Alltel sites already offer GSM roaming
service, adding GSM to all sites is likely,
and ATN's Commnet division has equally attractive
roaming relations with both CDMA and GSM
carriers. |
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The new Alltel will have a staff that can take care of
their customers in the form of the current
Alltel employees as well as Alltel stores.
ATN can continue to use the Alltel name for
at least several decades after the sale,
and many customers should not notice any
difference. One quirk may be that Alltel call centers may not be within any Alltel coverage areas. Verizon Wireless will be
helping Alltel's customer service for the
first year.
Our Reasoning: ATN has no customer service employees of
their own and Alltel employees should accept
any offers from ATN. |
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Through their Commnet Wireless division,
ATN currently operates totally as a roaming
carrier in the US. The relationships have
already been formed with the other carriers,
and there is no reason why Alltel cannot continue to offer roaming on all
other networks for coverage outside their
new areas. While Alltel phones could also roam on some of the 500+
cell sites operated by Commnet Wireless,
it is more likely they will use the facilities
of the carriers that serve urban areas. The new Alltel may be able to choose the more competitive
bidder among carriers, and would
also have
the potential of offering Unlimited
service
on various networks.
Our Reasoning: Commnet has become an important piece of
the coverage puzzle for other carriers and
should be able to continue to negotiate good
roaming deals. |
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The new Alltel will not have the bargaining power of the
old Alltel's large customer base, but should
be large enough to get some good phone prices.
Also, by inheriting a good broadband network,
they should be able to support smart phones
and cards. However, they will suffer from
not being able to sell the "hottest"
phones due to manufacturers' exclusivity
agreements with the largest carriers.
Our Reasoning: Other small carriers have been able to offer
a good selection of phones, especially if
they can maintain a high level of customer
loyalty. |
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In order to keep customers from defecting
to the major carriers, Alltel will need to offer more than just low prices.
They will need to establish themselves as
local heroes, supporting local events and
organizations. They will need to advertise
among the local media giving them that much
more of a local support base. And they will
need to make customers feel they are lacking
nothing by offering the wireless features
they want. As customers of a small company,
Alltel subscribers will each be much more
important than they would be with a large
company.
Our Reasoning: Other small carriers have survived with
this philosophy and Alltel already offers an advanced network. Alltel will enjoy their namesake's forward momentum
and should be able to maintain the same level
of service and features. Also, since ATN
hasn't "overpaid" for their network,
they should not need to be totally bottom-line
oriented to compete. ATN is already a successful
cellular operator with local service in several
other countries. |
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There could be a number of customer defections
in a highly competitive situation presented
by the major carriers, eroding Alltel's potential economy of scale. Verizon and
AT&T may 'cherry-pick' some of the more
talented staff and management. Like some
customers, Alltel employees may fear the
unknown. If Commnet Wireless is any indicator,
their employees are quite happy and any Alltel
staff should seriously consider staying with
a smaller, growing company instead of becoming
a faceless part of a large corporation.
Our Reasoning: Commnet, and possibly ATN, is a fun place
to work. Anyone joining them will immediately
become an important part of a small company,
yes, a big fish in a small pond. |
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