Is Verizon Wireless Buying Alltel For Its Assets Or For Its Culture Of Innovation?

imageVerizon Wireless’s (NYSE: VZ) $28.1 billion acquisition of Alltel will create the largest U.S. wireless carrier, but at the same time, it will eliminate one of the most innovative carriers in the country, which begs the question: Is Verizon buying Alltel for its towers and subscribers, or also for its forward-looking approach to the market?

As a regional carrier, Alltel may only serve 13 million subscribers in limited territories, but that gives the company a level of comfort and flexibility to quickly roll out new services without the constraints larger carriers face. It doesn’t worry that millions of users will start using a new service overnight that may crash the network, and it doesn’t have to train as many customer service and retail representatives every time it launches a new phone or application. So, the concern is that once apart of Verizon this attitude will fade. Some of it probably will, but if the merger gains regulatory approval, will companies lose an important petri dish, or gain a larger one?

As an example, Alltel was Seattle-based Ontela’s first customer. CEO Dan Shapiro said he heard about the potential merger yesterday while in a board meeting. Immediately, the topic of conversation focused on how it would affect the industry. “There


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