Verizon Wireless offers divestitures to buy Alltel

In a letter to the Federal Communications Commission, Verizon said after preliminary discussions with the Justice Department, it is committed to divesting overlapping spectrum, operations and other assets in 85 markets, mostly in the Midwest, West and Southeast.

Stifel Nicolaus analyst Blair Levin said the markets cover about 15 percent of Alltel's 13.2 million subscribers. AT&T Wireless, Leap Wireless International Inc. and MetroPCS Communications Inc. may all be interested in buying some of those assets, he said.

The offer from Verizon Wireless comes as it seeks regulatory approval of its planned acquisition of Alltel for $5.9 billion plus the assumption of $22.2 billion in debt. The deal, announced last month, would make Verizon Wireless the largest wireless carrier in the U.S.

The company, a joint venture of New York-based Verizon Communications Inc. and Britain's Vodafone Group PLC, already has 68.7 million subscribers.

The proposed merger has raised concerns about the impact on competition in the mainly rural, inland markets that Little Rock, Ark.-based Alltel serves.

But in its Tuesday letter to the FCC, Verizon said divesting some assets will ensure "there will be no loss of competition in any of these markets."

The company also said it is committed to honoring Alltel's existing roaming agreements with other regional and small wireless carriers that rely on the company to provide service in areas where they don't have operations.

Levin predicts the Justice Department will greenlight the Alltel acquisition as soon as the fourth quarter, but said FCC approval could take longer and come with additional conditions.

Shares of Verizon Communications rose $1.16, or 3.3 percent, to $35.84 Wednesday. The company's stock has traded between $33.15 and $46.24 in the past year.