Verizon (VZ), the No. 2 U.S. telco, is close to a $27 billion deal for Alltel, CNBC’s David Faber reports. If true, this makes plenty of sense:
- A deal for Alltel, the No. 5 U.S. wireless carrier, would make Verizon the biggest carrier with 80 million wireless subscribers, ahead of AT&T’s 71 million. Scale is important in the wireless business, both for cost savings and leverage.
- If the $27 billion total is accurate, it’s a good deal. TPG and Goldman Sachs Capital Partners spent $27.5 billion take it private last year.
- Verizon and Alltel both operate CDMA networks, which means their phones and towers are interchangeable.
- Verizon would save money it spends on roaming charges when its subscribers are on Alltel’s network, which covers huge parts of the U.S.
More to come as details emerge…