Verizon Communications' decision to buy wireless carrier Alltel for $28.1 billion in cash and debt has set many tongues wagging. Three industry analysts weigh in on the deal's implications for the mobile ecosystem.

Once this acquisition is completed by year's end, include a salute from the Federal Communications Commission, Basking Ridge, NJ-based Verizon Communications will overtake AT&T Inc. to become the telecoms company with the most number of wireless subscribers: 80 million. Verizon Communications' Verizon Wireless joint venture -- Britain's Vodafone owns 45 percent -- has its strengths in the Northeast and on the East Coast. Alltel, Little Rock, AR, has more than 13 million subscribers, many of them in the Midwest. So the complement is clear. Another advantage is the common CDMA technology that both share. But the deal will affect the U.S. marketplace, as analysts from IDC, JupiterResearch and Harris Interactive point out.

Lewis Ward, research manager for wireless, IDC, Framingham, MA
I think the major driver here is for Verizon to become the No. 1 again, the largest operator in the United States. Obviously there's CDMA there, so there's a lot of assets that Alltel has in place in the market.

I think the mobile marketing and advertising part of this is certainly an important aspect of where the market is going, but it isn't something that is central to the reasoning or the rationale that drove this deal.

Benefit to Verizon
Alltel is a regional carrier, so it's got some rural assets that might complement some of the Northeastern or East Coast focus that Verizon has had.

I believe most of Alltel's customers are in the Midwest, so it's a complementary geographic angle here.

Negatives of the deal
Certainly the FCC is going to review this deal. It's further consolidation among the top five players, so they're going to take a closer look at this deal.

It's possible there could be some issues with divestitures in certain markets where competition is not viewed as competition might be.

A lot of the smaller regional players have been complaining that it's very difficult for them to get exclusive handset deals at a reasonable price. And the roaming deals they have with the national operators put them at a competitive disadvantage.

So these are factors that the FCC is going to consider when it's approving or disapproving this deal.

What about the consumer?
I suppose that remains to be seen. Certainly Verizon has a lot going for it -- a lot of marketing clout, more stores, they can do more advertising, plus they have the international roaming deals with Vodafone.

So, some Alltel customers who might not have been able to roam will be able to roam internationally.

Why do this deal?
We've been expecting this for at least five years. It's a natural end-point for Alltel, which was probably always acquisition by Verizon.

I personally think that we do need to have at least four companies competing at a national level for the force of competition to really drive advantages for the consumer.

They [Alltel] were No. 5, the biggest regional player. They're going to bring network towers and they're bringing some more spectrum.

The deal is that they're going to reap some synergies through network consolidation, getting rid of duplicate physical assets, and there's probably going to be downsizing of some duplicating organizational functions.

They're also going to get rid of some roaming expenses, so they're no longer charging each other for roaming.

The main thing here is that Verizon wants to be the No. 1 mobile operator again.

Neil Strother, Kirkland, WA-based analyst, JupiterResearch
It's pretty clear they've become the No. 1 player in terms of subscribers and if there's anything that goes along with that in mobile marketing, it's the chance to be a leader.

At this point, I don't think either Verizon or Alltel has been the leader in mobile marketing. So there's an opportunity for the new combined companies to forge ahead on mobile marketing.

The deal's ramifications
I think one of the things that Alltel brings is a bit of a history as an innovator. For example, they were one of the first to come out with the "Friends and Family Circle" plan.

But the point is, can that innovation and that nimbleness of being a small carrier be continued within a larger corporation?

My guess is that it fits in the newer side of Verizon. The leadership has made some very strong statements of being an open network and so in that view, an acquisition like Alltel could mean there will be some new services and some new applications that are likely to have a marketing component.

I think that from a competitive standpoint, obviously this reduces the national players by one. But given Alltel's relative small size, it probably won't have a great impact on most consumers in terms of pricing and competitiveness.

On the other hand, I think we'll still have a very competitive AT&T and that the Nos. 3 and 4 players, Sprint and T-Mobile, will still be around in some way and pressure will be on them to compete in some way or the other.

So I think from a consumer standpoint you'll still have choices. Because Sprint is pushing WiMAX over the next few years. You have that has a potential technology and with Google's involvement, you have a situation where open networks and open applications, including marketing around that, that all the carriers including the new Verizon-Alltel, will be looking at ways to monetize the mobile Web.

Milton Ellis, Aliso Viejo, CA-based vice president and senior consultant, Harris Interactive
Certainly it's going to impact the overall plans they've offered to consumers. Because if we look at Alltel, they might get some uplift. If you look at their Friends and Family Circle plan, they have five, 10, 20 numbers, in a circle, but if they go to the Verizon plan, you can go to anyone on the Verizon network and call them without incurring any minutes' usage. That opens the market beyond 20.

The implications
It'll also have an impact on the handsets that'll be offered to consumers. But this might be minimized because the new spectrum that Verizon purchased in the recent FCC auctions calls for opening up their network to various devices.

For now, Alltel carries some devices that Verizon doesn't carry and so the best of both worlds would be for Verizon to support the handsets that are currently supported on the network and offer that to the end consumers.

Effect on mobile marketing
Certainly this increases the overall coverage that Verizon provides, so if you strike a deal, it makes it much easier for advertising to access a much broader base of consumers.

If you're an advertiser, it's easier if you don't have to negotiate with different carriers.