Alltel purchases Midwest Wireless

[telusmod]

Alltel purchased privately held Midwest Wireless for $1.075 billion. The acquisition comes just months after Alltel closed on its $6 billion purchase of Western and follows its 2002 acquisition of CenturyTel's wireless assets for $1.6 billion. Both carriers operate CDMA-based networks and rely on Qualcomm Inc.'s BREW platform to deliver content.

Alltel noted that the deal will add new markets contiguous to its existing operations and that Midwest Wireless' highly coveted 850 MHz spectrum covers approximately 1.9 million potential customers in the region.

The purchase should not significantly alter Alltel's financial position. Analysts noted the company is lightly leveraged and still plans to spin off its wireline assets, as well as Western Wireless' remaining international holdings. Alltel expects the Midwest Wireless deal to close in the second half of next year, pending regulatory approval. Analysts noted that Alltel might be forced to divest a handful of 850 MHz markets that overlap its operations. Cingular and U.S. Cellular, which also operate a CDMA/BREW network, are the most likely buyers for those assets.