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Alltel gets bay GTE Wireless market

The 13-state swap should be simple for local customers, who can keep their existing phones and service contracts.

GTE Wireless customers in the Tampa Bay area will become customers of Alltel Corp. by this summer as part of a 13-state trade of wireless markets by Bell Atlantic Corp. and merger partner GTE Corp.

The swaps are part of a series of deals this year that will alter the roster of wireless service providers in Tampa Bay and dozens of other large markets nationwide.

Regulators are requiring trades of wireless markets before allowing Bell Atlantic to form a joint venture with Vodafone AirTouch PLC _ and later, to merge with GTE _ to become the nation's biggest provider of wireless services.

The switch to Alltel should be relatively painless for GTE Wireless customers in the bay area. They can keep their existing phones, and Alltel will honor their current service contracts. When the contracts expire, wireless customers can stick with Alltel or shop among at least six other wireless providers serving portions of the West Coast of Florida.

Alltel, a 21,000-employee company based in Little Rock, Ark., typically pushes into a new market with wireless phone service. Then it sells other services such as long-distance calling, Internet access or paging in a "bundled" deal: The more services a customer buys, the cheaper each service costs.

Alltel already provides telecommunications services in portions of the Panhandle, including Tallahassee, where it offers a wireless phone service deal of $24.95 a month for 60 minutes of air time. That price decreases as the customer uses other Alltel services.

When Alltel entered the Jacksonville market earlier in the 1990s, it bought the naming rights to the stadium of the Jacksonville Jaguars, now known as Alltel Stadium. In an aggressive move, the company this month began selling hard-wired residential telephone service in Jacksonville in direct competition with the area's local phone company, BellSouth.

Alltel spokesman Andrew Moreau said it was unlikely the company would soon offer any similar residential service in the Tampa Bay area. But the company probably will offer its other services in a bundled package once it has established a presence.

When phone companies swap wireless assets, they try to group customers into clusters to cut costs. Alltel's expansion strategy in Florida is no different.

Along with the Tampa Bay market, Alltel is swapping markets with GTE to gain access to Lakeland, Sarasota, Bradenton, Fort Myers and other nearby areas.

"The swaps in Florida now give us a cluster of markets that run through the Panhandle and down Florida's western coast," Moreau said.

If GTE Wireless is not afront-runner of wireless services, neither is Alltel. In a 1999 customer satisfaction survey of wireless providers in 22 U.S. markets, J.D Power and Associates gave its best marks to other wireless providers. Customers surveyed in the markets of Charlotte and Las Vegas preferred BellSouth and AT&T Wireless, respectively, over Alltel. GTE was preferred over Houston Cellular in Houston but lost out to AT&T in Tampa, Cellular One in San Francisco and AirTouch in San Diego.

Here's why the changes are taking place in the bay area.

In order for Bell Atlantic to create a wireless service giant with Vodafone and GTE, it had to eliminate overlaps, including those in the Tampa Bay area. Vodafone AirTouch owns parts of Primeco, a wireless provider serving Tampa Bay.

By trading GTE Wireless' markets in the bay area and other parts of the country to Alltel, Bell Atlantic can combine with Vodafone and GTE and still retain a presence _ Primeco _ in the market. Once those deals are complete, Bell Atlantic will begin competing under a new name that has yet to be concocted. Primeco also will adopt the new name.

For thousands of wireless phone customers in the Tampa Bay area, Tuesday's deals help resolve some of the confusion stemming from the series of pending deals by Bell Atlantic.

Some wireless customers had been expected to become customers of the new company, but it had been unclear whether Bell Atlantic would divest portions of GTE or Primeco.

The wireless systems traded to Alltel serve 1.5-million customers across 27 markets in Alabama, Arizona, Florida, Ohio, New Mexico, South Carolina and Texas. In exchange, Bell Atlantic and its partners get Alltel's majority and minority interests in wireless systems serving 1-million customers across 42 markets in Illinois, Indiana, Iowa, Nevada, New York and Pennsylvania.

Alltel also agreed to pay about $600-million to Bell Atlantic, GTE and Vodafone, and the companies signed a new national roaming agreement that will allow their respective customers to make wireless calls on each other's networks at reduced rates.

With its new markets, Alltel will have almost 5.8-million subscribers, and its potential customers will expand 15 percent to 46-million, raising it to No. 4 ahead of BellSouth's wireless business.

Wireless survivors

The Tampa Bay area faces big changes this year among the providers of wireless telephone services. The transformed survivors are expected to include:

Alltel _ Will replace GTE Wireless by summer.

Primeco _ Will become the local arm of the company to be formed by Bell Atlantic- Vodafone-GTE combination. Primeco name will change later this year to reflect the new company brand that's yet to be announced.

Aerial Communications _ Voicestream Wireless is buying both Aerial and Omnipoint wireless providers.

Sprint PCS _ MCI Worldcom is seeking to buy Sprint.

AT&T _ Service should continue under same name.

BellSouth _ Service should continue under same name.

Nextel _ Caters mostly to business users.

At a glance

IN TAMPA BAY: Alltel takes over area's GTE Wireless market by summer. GTE Wireless customers become Alltel customers.

HEADQUARTERS: Little Rock, Ark.

SERVICES: Provides wireline local, long-distance, network access and Internet services, wireless communications and information processing management services and advanced application software.

EMPLOYEES: 21,000

REVENUES: $6.3-billion in 1999, up 12 percent from 1998.

EARNINGS: $822-million in 1999, up 25 percent from 1998.

CEO: Joe Ford

MARKETS: Wireless services in 25 states, including Jacksonville and Tallahassee in Florida. Wireline services in 17 states.

STOCK: Closed Tuesday at $71, up 6.4 percent. Down from $91 high in December.

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