The nation's largest cellular telephone provider was born today after Verizon Communications (NYSE: VZ) agreed to purchase Alltel for approximately $28.1 billion. The deal will help Verizon's wireless business surpass that of AT&T Wireless to take a strong lead.

The deal also represents one of the quickest flips in history as Alltel's private equity owners just completed buying the company last fall for about $27.5 billion. The result was a fast $600 million profit in just about a year. The consortium had reportedly been sitting on huge debt-related losses and were pushing hard to sell.

Under the terms of the deal, Verizon will acquire the equity of Alltel for $5.9 billion and assume $22.2 billion in debt. The transaction is slated to be completed by the end of the year. The move caught investors by surprise given the fact that it was rejected in the past due to Vodafone's resistance - a parter with Verizon Wireless.

The move also positions Verizon increasingly as a wireless business as opposed to a wireline business and is a logical fit. Both companies share the same cellular technology, CDMA, and Alltel services areas that are not serviced by Verizon. This positive spin helped push shares of Verizon up some five percent on the day.

In the end, this move underscores that the wireless industry is no place for independent telecom providers. It is the giants that thrive in this arena and even private equity funds are starting to realize that they cannot compete. It will be interesting to see how this affects others in the sector.

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