media logos

Will Alltel pass the buck to subscribers?

This is mainly an industry story, but we feel like sharing it with you. Yes yes, industry news can get boring. When reading this, though, a light bulb lit up in our head: this is an instance where industry news can have a direct, positive effect on consumers. At least in theory. We know that in practice companies like this don’t pass the buck to consumers — maybe in stock dividends, but not in cost of service. We’re of the belief that companies will open themselves up for more business if they pass the buck to consumers, but what do we know? We just read about this stuff every day.

Since it reorganized its purchasing department back in 2005, Alltel has saved the company $1 billion. That speaks volumes to how the company is being run. Instead of looking at ways to increase profitability and deciding to hike prices, Alltel looked within and found some glaring errors in the way they conducted business. That, we think, is admirable.

So now not only aren’t they going to hike your rates, but they’re in a position to make a real move for consumers. Yes, a good portion of that $1 billion is going to go towards operational improvements. Remember, though, that this is also beneficial to the consumer. They can build more cell sites, thus expanding and improving coverage.

As we see it, this is an opportunity to add to or improve their calling plans. We’re not saying they should drop the per-minute rate, because that is a calculated cost. But they can offer more options on their plans, like a cheaper unlimited nights and weekends program. We think that even a little effort on the direct customer end (that is, the plans they offer) will go a long way to procuring new business.

Given the way this company is being run now, we do have faith that Alltel will be able to even further improve the quality and quantity of its service. And senior vice president Scott Searls is a major reason for our faith. Just listen to how this guy conducts business:

“If you ask someone a specific question they may say ‘I have no idea what I’m going to spend on IT hardware next year,'” says Searls. “Then we ask ‘well do you think it will be more than last year.’ They say ‘oh yeah it will be more than last year, 10–20% more, probably about 15%.’ All of a sudden you know. Then you dig a little deeper. ‘Do you think that is mostly servers or direct-access storage devices?’ They say ‘oh, it’ll be storage.’ All of a sudden you have it.”

We like the way he thinks. And we think it means a bright future for Alltel.