In a press release earlier today, regional carriers Alltel Wireless and U.S. Cellular have announced a landmark agreement whereby both companies will sell prepaid service under the now unified U Prepaid brand previously used by Alltel to sell its own prepaid service. The service will also benefit from wide distribution, as 300 Walmart locations will carry the revamped service in each carrier’s respective coverage areas, with four new phones in the Android-powered Samsung Repp smartphone, the LG Attune/LG Exchange, LG Saber with full QWERTY keyboards, and the Samsung Chrono clamshell. Depending on the service area, access will be provided by either Alltel or U.S. Cellular.
The agreement between both companies also represents how competitive the wireless sales landscape has become in recent years, as both companies have historically been smaller players in the US industry compared to the big three, with Verizon Wireless purchasing the previous incarnation of Alltel in 2009 right as the company was making its own push for nationwide recognition and expansion, only to be purchased and absorbed by the largest carrier in the nation.
The current incarnation of Alltel, which is now a brand held by a private holding company is a much smaller company than the previous Alltel, having had its native service area nearly cut by more than half and now limited to select regions in the Southeast US, while US Cellular’s own coverage area remains centered on the rural areas and smaller metropolitan markets of the country. For them to forge such an agreement represents their actual position in the marketplace and the declining state of competitiveness for smaller regional carriers compared to three years ago.