Cellphone plans: Is tiny Alltel better than giant Verizon?

Subscribers to Alltel, the relatively small cellphone carrier acquired by Verizon Wireless last January, will be able to keep their Alltel plans as Verizon takes over their accounts, according to a Verizon spokeswoman. And they probably should do so, according to our head-to-head analysis of comparable Alltel and Verizon plans.

In fact, our numbers suggest that Alltel's 11 million customers will be able to get more minutes of talk time and save $60 to $420 a year by hanging on to their old plans rather than switching to a Verizon one, as they are allowed to do, if they wish.

Since Verizon's and Alltel's wireless national-plan rates don't vary by city, we picked a representative city, Cleveland, in which both Verizon and Alltel (available in 118 metro areas and 259 rural and other markets) are active. We then compared what Alltel customers there would gain and lose if they switched their existing one-line or family two-line national voice plans to the most comparable Verizon plans.

The results show that the existing Alltel plans delivered more talk time for the same or lower price, or lower monthly fees, in 9 of the 11 of the match-ups we studied.

Sometimes that edge was not immediately apparent.  For example Verizon's 900-minute $60 per month Nationwide Basic one-line plan looks as good as Alltel's 900-minute $60 per month National Freedom one-line plan. But the Alltel plan allows free unlimited calls to and from 10 My Circle designated phone numbers on any networkwhile the Verizon plan allows the same for only five Friends & Family numbers. That's a big value disparity, especially if you designate My Circle numbers to friends who aren't on the Verizon network and would otherwise be billable. Verizon customers can also make unlimited free mobile-to-mobile calls to 80 million other Verizon Wireless customers; the newly acquired Alltel customers got that same benefit starting last February.

(The Alltel and Verizon plans also both provide unlimited free night and weekend calling, a nationwide home calling area, and no extra charge for long-distance calling. Our latest, September 2008, survey of cellular service satisfaction among 51,740 ConsumerReports.org subscribers in 23 U.S. cities found Verizon top-rated in all of those markets, and on-par with Alltel in four markets where that carrier also operated—Charlotte, Cleveland, Phoenix, and Tampa.)

Commenting on our findings, Robin Nicol, a Verizon spokeswoman, said that Verizon customers had gained "greater value" with the addition of Friends & Family calling, which was modeled around My Circle and wasn't available before Alltel joined the Verizon family.

In May, Verizon will begin phasing out the Alltel brand name, a process that should be completed by next fall. The Alltel My Circle feature will be re-named Friends & Family.  Regardless of the name changes, however, Alltel customers are not required to switch to a Verizon plan; they can keep their current Alltel price plan as long as they want, says Nicol.

Consumers Union, publisher of Consumer Reports, led efforts to oppose Verizon's purchase of Alltel on grounds that it would reduce competition. Our plan comparison shows that Verizon's buy-out removed an often lower-priced competitor from the marketplace. 

We recommend that Alltel customers carefully compare the value of their options and hang on to their Alltel plan if it's a better deal and meets their calling needs.

As for the 71 million customers who were with Verizon before the Alltel acquisition, they might want to ask about getting access to those often-better Alltel plans, or something similar. After all, it's all in the family now... —Jeff Blyskal