Trust keeps ‘Alltel’ alive

The nation’s eighth-largest carrier has an unorthodox objective: to bite the hand that feeds it.
The Verizon Alltel Management Trust, a 2,500-employee business, is a subsidy of Verizon Wireless that came into being when the industry’s new No. 1 player was forced to divest wireless assets in 105 markets as a condition of its acquisition of Alltel Communications L.L.C.
The trust is charged with running the day-to-day operations for 2.2 million subscribers in 105 markets, keeping those assets valuable until a new owner can be found, said Paul Bowersock, senior sales and operations leader at Alltel.
“The trust’s main goal until these markets are sold and transitioned to a new owner is to ensure the competitive viability,” Bowersock said, “so our goal is to grow revenues,” as well as maintain and add wireless subscribers. Indeed, the carrier plans to grow its revenues at the same pace as last year, and even improve upon 2008 metrics.
And as these 2,500 employees promote the Alltel brand and its strengths, Verizon Wireless is their main competition in these markets – and they get their paychecks from Verizon Wireless.
“Technically, we’re Verizon Wireless employees,” Bowersock explained, since Alltel no longer exists. (Most of the employees were formerly with Alltel.) Because these markets will be sold eventually, it’s in the employees’ interests to keep the network operating at top form and keep existing customers satisfied.
The company has about 150 employees in Little Rock, Ark., with most employees working in the towns of the wireless properties to be divested. Customers of the trust still receive an Alltel-branded experience, whether through an Alltel-branded bill, or in retail outlets or online, Bowersock said. Interestingly, customers are also bound by the conditions of their Alltel agreements, so customers who would want to churn to Verizon Wireless would still be required to pay early termination fees. AT&T Mobility and private-equity firms have been mentioned as possible buyers for the assets. The Department of Justice determined that in all 105 markets, Alltel and Verizon had the majority of market share, but some divested markets have additional competition, according to Alltel spokesman Wes Brown.
Because no one knows how long it will take to find a new owner for the properties and to transition those properties, Bowersock said the trust is continuing to advertise and is also on track with new handset offers and network upgrades.
“We’re projecting well into 2009 and through the first part of 2010,” Bowersock said, noting that handset launches take months to get into the production pipeline.
One of the biggest challenges for the carrier is trying to assuage customer confusion. Trust employees talking to customers who are confused by the Verizon Wireless acquisition answer questions honestly, Bowersock said.
“All the things you love about Alltel, the connection to community, the brand position with Chad and the ads . you’re going to continue to see all that and continue to benefit,” Bowersock said.
Steven Cannon, a partner of the Washington, D.C., law firm Constantine Cannon, oversees the trust. Cannon also is the trustee for properties that Verizon Wireless must divest from its purchase of Rural Cellular Corp. and oversaw the divested properties from AT&T Mobility’s purchase of Dobson Communications Corp. The trust doesn’t plan to report quarterly revenues, subscriber numbers or capital expenses, Bowersock said, but would publicly announce network upgrades as they happen.