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The Verizon/Alltel merger: The consumer promises and issues
Verizon, one of the biggest national cell carriers, today announced plans to swallow one of the smallest, Alltel. For consumers, the possible merger raises promise. And, like many such deals, it also raises a number of issues and questions.
Despite their differing size, the companies share a number of attributes that bode well for consumers in a possible merger, beginning with high customer satisfaction. In our recent surveys of cellphone service, both carriers have been standouts for connectivity—that is, for minimizing problems with lack of service, full circuits, or dropped calls—and for customer service.
They also have networks that are technologically compatible—being heavily digital and using CDMA technology. That promises to increase the chance that customers of one company will get access to services now offered by the other, and that subscribers will more fully benefit from an expanded, joint network. It may also minimize the problems that ensued after two other recent cellphone mergers, involving companies with divergent technologies. The Sprint-Nextel merger, in 2005, brought together one company that used a CDMA network and another that used Iden technology. The 2004 merger of Cingular and AT&T married one company that used several technologies, including older analog networks, with another that had a heavily-digital GSM network.
A number of questions and uncertainties remain, however—beginning with whether federal regulators will allow the merger to proceed, and when. (The companies themselves are aiming for completion by year's end.) Consumer advocates will weigh in on the deal's benefits and pitfalls. Those groups include Consumers' Union, the publisher of Consumer Reports, which is already flagging such issues as whether provisions may be required to help cell subscribers in some rural areas where Alltel is the leading carrier and Verizon may be a close competitor.
—Paul Reynolds
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