ALLTEL Corporation is a customer-focused communications company.'The Company
owns subsidiaries that provide wireless and wireline local, long-distance, network
access and Internet services.'Telecommunications products are warehoused and
sold by the Company's distribution subsidiary.'A subsidiary also publishes telephone
directories for affiliates and other independent telephone companies.'In addition,
a subsidiary provides billing, customer care and other data processing and outsourcing
services to telecommunications companies.'The Company is incorporated in the
state of Delaware.
The Company has focused its communications business strategy on growing its
customer base through strategic acquisitions and enhancing the value of its
customer relationships by offering additional products and services and providing
superior customer service.'Since 1998, the Company has significantly expanded
its communications customer base.'Beginning with the 1998 merger with 360' Communications
Company and continuing with the mergers with Aliant and Liberty in 1999, the
property swaps completed with Bell Atlantic and GTE in 2000, and the acquisition
of substantially all of CenturyTel's wireless assets in 2002 have significantly
expanded ALLTEL's wireless business and enhanced the Company's ability to provide
multiple communications services to its customers.'The acquisition of Verizon's
wireline properties in Kentucky, completed in 2002, increased ALLTEL's total
number of wireline customers to more than 3 million.'Including customers of
its wireless, wireline and long-distance services, the Company serves more than
12 million communications customers in 26 states.'ALLTEL operates its communications
businesses as a single operation capable of delivering to customers one-stop
shopping for a full range of communications products and services.'In addition
to its wireless, wireline and long-distance service offerings, the Company also
provides Internet, high-speed data transport services ('DSL'), paging and cable
television services in select markets.
ALLTEL is organized based on the products and services that it offers.'Under
this organizational structure, the Company's communications operations consist
of its wireless, wireline and communications support services segments.'ALLTEL's
wireless segment consists of the Company's cellular, PCS and paging operations.'
The wireline segment consists of ALLTEL's incumbent local exchange carrier ('ILEC'),
competitive local exchange carrier ('CLEC') and Internet access operations.'
Communications support services consist of the Company's long-distance and network
management services, communications products, directory publishing operations
and the retained telecommunications information services operations of ALLTEL
Information Services, Inc. that were not sold to Fidelity National.'
COMPETITION
Substantial and increasing competition exists within the wireless communications
industry.'Cellular, PCS and Enhanced Specialized Mobile Radio service providers
may operate in the same geographic area, along with any number of resellers
that buy bulk wireless services from one of the wireless providers and resell
it to their customers.'PCS services generally consist of wireless two-way communications
services for voice, data and other transmissions employing digital technology.'
The entry of multiple competitors, including PCS providers, within the Company's
wireless markets has made it increasingly difficult to attract new customers
and retain existing ones.'Competition for customers among wireless service providers
is based primarily on the types of services and features offered, call quality,
customer service, system coverage and price.'ALLTEL has responded to this growing
competitive environment by capitalizing on its position as an incumbent wireless
service provider by providing high capacity networks, strong distribution channels
and superior customer service and by developing innovative rate plans and offering
new products and services.'ALLTEL's ability to compete successfully in the future
will depend upon the Company's ability to anticipate and respond to changes
in technology, customer preferences, new service offerings, demographic trends,
economic conditions and competitors' pricing strategies.
Some of the Company's ILEC operations have begun to experience competition
in their local service areas.'Sources of competition to ALLTEL's local exchange
business include, but are not limited to, resellers of local exchange services,
interexchange carriers, satellite transmission services, wireless communications
providers, cable television companies, and competitive access service providers
including those utilizing Unbundled Network Elements-Platform ('UNE-P').'
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1.64%