Verizon to Sell Some Alltel Assets to AT&T

By AMOL SHARMA Verizon Wireless agreed to sell some wireless assets to rival AT&T Inc. for $2.35 billion after government regulators mandated that Verizon divest itself of properties related to its acquisition of Alltel Corp. Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC, purchased Alltel early this year in a $28.1 billion transaction. The assets it was required to shed include 2.1 million wireless subscribers in 22 states, as well as radio spectrum and other assets necessary to run the businesses in those markets. AT&T said the markets it is purchasing, which are mainly in rural areas and are mostly former Alltel territories, include 1.5 million subscribers. In a separate transaction, Verizon agreed to purchase a small number of service areas from AT&T for $240 million. Digits Out With Verizon Hub, In With Verizon Netbooks AT&T took care to avoid buying Alltel markets where it would gain too much clout and attract antitrust scrutiny, one person familiar with the deal said. Verizon added 13.2 million subscribers from the Alltel deal and reported a total customer base of 86.6 million at the end of the first quarter, making it the largest U.S. wireless carrier. The company expects about $1 billion in savings this year as it integrates Alltel. Verizon has already adopted a special "Friends and Family" service plan based on one of Alltel's that allows unlimited calling to any five or 10 numbers, including landlines. Verizon still must shed some other Alltel assets. Other bidders in the divestiture process could include private-equity firms and small wireless carriers, people familiar with the situation said. CNBC reported earlier that Verizon was nearing a deal with AT&T for the Alltel assets. The Wall Street Journal reported in February that AT&T had emerged as a bidder and was likely to walk away with a sizable chunk of the Alltel assets. Write to Amol Sharma at amol.sharma@wsj.com