The Alltel buyout
Posted: May 25, 2007Alltel was purchased last week by a private equity group. Most of the news has been spent on what this means to the wireless business. However, we here at Swampland.com want to focus on Alltel's history, and how keeping with its this history might effect the future success of the company.
Alltel began as in 1943 in Arkansas as the Allied Telephone Company. When Allied merged with Mid-Continent Telephone in 1983, today's wireless-focused company. Within two years, Alltel was opening wireless stores and beginning their network infrastructure.
Alltel was the 5th largest wireless company in America before the recent buyout. However, it is interesting to look at how management built the company.
Unlike most of their competitors, Alltel focused on rural areas mainly in the Swampland footprint. They stayed away from the highly competitive urban areas and chose to serve customers that Sprint, Verizon, and Cingular (now AT&T) chose to ignore. Alltel also carefully chose to market to the customer base by using country artists like Faith Hill as spokespeople, endorsing NASCAR teams, as well as securing naming rights on Jacksonville's stadium through their 2005 Super Bowl year. Jacksonville is the NFL's smallest market outside of Green Bay.
Alltel proved as NASCAR and WalMart have that a national company can be built out of the South by serving the South. Now that investment bankers have bought the company, it will be interesting to see how they value the asset they have purchased. Alltel may be combined with another carrier (maybe the faltering Sprint) to build a larger network.
Whatever happens to Alltel in the future, Swampland.com wishes to recognize that the company was a pioneer. Let's hope that Arkansas will gain from this buyout and not lose one of its large employers.
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