On Monday,
$40 billion worth of telecom deals were announced as the Chinese government restructures the industry there. Sweden's TeliaSonera AB just made a
$42 billion bid for France Télécom SA. In the U.S., joint venture Verizon Wireless is
acquiring rural cellular provider Alltel Corp. for $28.1 billion -- including $22.2 billion in debt -- from its
private equity owners of seven months.
We haven't seen any megadeals in this sector since AT&T Inc. (which would fall to No. 2 in wireless if the Verizon deal closes) bought Cingular Wireless for $41 billion and Sprint merged with Nextel
for $35 billion four years ago. The latter of those deals has tanked
due to technical integration woes. BusinessWeek says Verizon and Alltel, in
contrast, both use the same wireless technology, known as CDMA, which
should facilitate a smoother integration. BW also recalled the recently floated idea of Deutsche Telecom AG merging its T-Mobile USA operation with Sprint Nextel Corp. and said these deals could be a sign of broader consolidation. MarketWatch mentioned these
possible acquisition targets:
- Telephone and Data Systems Inc. and its majority-owned U.S. Cellular Corp. division
- MetroPCS Communications and
- Leap Wireless
BW reports Verizon's and Alltel's networks don't overlap in many markets making them good
"roaming partners," a situation that could lead to cost savings of $1 billion in the first year. An interesting note comes from Forbes: Vodafone Group plc hasn't received a
dividend from its 45% stake in Verizon Wireless since 2005, and this deal could push back the expected reinstatement of 2010 even further.
TheDeal.com notes Verizon Wireless has a pending $2.67 billion buyout of Rural Cellular Corp., which, like Alltel, operates in less-populated markets. -
Baz HiralalVerizon Wireless to acquire AlltelVerizon Wireless-Alltel talks spotlight power shiftVerizon and Alltel -- Roaming Partners?
From around the globe:China Mobile peers play catch up, China catching up with 3GTeliaSonera rebuffs France Télécom
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