Goodbye, Alltel - InformationWeek

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Commentary
6/5/2008
11:37 AM
Paul Travis
Paul Travis
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Goodbye, Alltel

Another venerable telco name is about to disappear in the wake of Verizon Wireless' announcement that it is going to buy Alltel Corp. Alltel joins GTE, Contel, Centel and scores of other telephone company names that have disappeared in the past couple of decades as the industry consolidated and continues to be decimated by competition from new technology.

Another venerable telco name is about to disappear in the wake of Verizon Wireless' announcement that it is going to buy Alltel Corp. Alltel joins GTE, Contel, Centel and scores of other telephone company names that have disappeared in the past couple of decades as the industry consolidated and continues to be decimated by competition from new technology.Back when I was a young tech reporter covering the telephone industry, there was AT&T and the Bell system, which dominated the industry. And there were hundreds of "independent" telephone companies -- independent because they weren't part of the Bell System. Some, like GTE, were large enough to rival the Bell companies in power and influence. Yet, even the strongest ones have failed to survive. Over the years they merged with each other and many were acquired by the offspring of the Bell System that were created when the federal government broke up the Bell monopoly.

Alltel's history is typical of what has happened to the industry. Born in Little Rock, Ark., in 1943 as Allied Telephone, it merged with the Mid-Continent Telephone Corp. in 1983 and launched its first wireless system in Charlotte, N.C., in 1985. It bought Systematics in 1990 and renamed it Alltel Information Services. In 1993, it bought GTE's directory publishing contracts and GTE's telephone properties in Georgia. It began offering long-distance service in 1996.

Alltel merged its wireline and wireless businesses in 1997 to offer a suite of communications services and merged with 360 Communications in 1998, growing to 2.6 million customers in 15 states. It merged with Standard Group, Alliant Communications, and Liberty Cellular in 1999, and more mergers followed. Then Alltel spun off its landline business in 2006 and effectively went private last year when it was bought by TPG Capital and GS Capital Partners.

The same things were going on in the rest of the industry, and more mergers, acquisitions, and consolidation have left us with two telecom giants on the landline side and the wireless side of the business -- AT&T and Verizon. Given the history of the industry, that isn't a good thing. These companies aren't known for aggressively competing with each other. And for those of us who remember when there were only two wireless companies providing cellular phone service in each city, we didn't have a lot of choice when it came to phones or innovative services or affordable pricing plans.

Now, the main hope for competition and the benefits it offers comes from the cable companies, who are battling the phone companies for every voice-data-video customer, voice-over-IP service providers, and the movement for "open" wireless systems and handsets that is spearheaded by Google and other computer and Internet companies. There are still hundreds of "independent" phone companies, mainly small ones serving towns and areas that the big boys aren't interested in, but that won't help most of us living in large metro areas.

I appreciate how far we've come in the world of communications. There is no turning back from the broadband, wireless, Internet Age we find ourselves in, and I wouldn't go back even if I could. But I will miss some of the feisty folks and companies who helped to create a communications industry that was the best in the world for more than a century. Goodbye, Alltel. You will be missed.

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