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Telecommunications industry

Telecommunications Giants Trade Assets in Bid for Justice Department Approval

Strategic Insights

— 1 min read

In a move aimed at satisfying the U.S. Justice Department's conditions for approving the acquisition of GTE by Bell Atlantic Corp., the telecommunications giants have agreed to trade wireless networks with Alltel Corp. The deal, announced Tuesday, will eliminate potential overlaps between Bell Atlantic and Vodafone AirTouch PLC in their planned mobile alliance. As a result of the deal, Alltel will acquire wireless systems serving 1.5 million customers in 27 markets across the country, while Bell Atlantic and its partners will receive Alltel's majority and minority interests in wireless systems serving 1 million customers in 42 markets.

Key Takeaways:

  • The deal involves Bell Atlantic trading wireless networks with Alltel in 13 states, including Florida, where all GTE Wireless customers will become customers of Alltel.
  • Approximately half of GTE Wireless' 1,200 Florida employees will begin working for Alltel, mostly in sales and operations, while the fate of the remaining 600 workers will be decided within 30 days.
  • Alltel will also pay about $600 million to Bell Atlantic, GTE, and Vodafone as part of the deal.
  • The combined Bell Atlantic-GTE-Vodafone venture will cover markets with 23 million wireless customers and a population of 223 million people after the swaps with Alltel.
  • Alltel will have 5.8 million wireless customers in markets with a population of 46 million people.

Statistics:

  • 1.5 million customers will be served by the wireless systems being traded to Alltel.
  • 27 markets will be covered by the wireless systems being traded to Alltel.
  • 1 million customers will be served by the wireless systems being traded to Bell Atlantic and its partners.
  • 42 markets will be covered by the wireless systems being traded to Bell Atlantic and its partners.
  • $600 million will be paid by Alltel to Bell Atlantic, GTE, and Vodafone as part of the deal.
  • 223 million people will be covered by the combined Bell Atlantic-GTE-Vodafone venture.
  • 23 million wireless customers will be served by the combined Bell Atlantic-GTE-Vodafone venture.
  • 5.8 million wireless customers will be served by Alltel.
  • 46 million people will be covered by Alltel's wireless markets.

Sources:

  • "Telecommunications Giants Trade Assets, Hoping for Justice Dept. Approval" (Source: AP Online via LexisNexis)
  • (Note: No additional sources were cited in the original text.)

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