Alltel Wireless

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LITTLE ROCK, Ark. - Alltel achieved solid results in the third quarter, driven by wireless growth and profitability as the company surpassed the milestone of 10 million wireless customers. Alltel reported fully diluted earnings per share under Generally Accepted Accounting Principles (GAAP) of 98 cents, including several one-time items that resulted in a net after-tax gain of $30 million. Excluding the one-time items, fully diluted earnings per share from current businesses was 90 cents.

In the quarter, Alltel completed its merger with Western Wireless Corporation, further expanding the company's 850 megahertz wireless business and increasing the company's wireless revenue mix to nearly 70 percent. Alltel now owns and operates the nation's largest wireless network.

Also this quarter, Alltel continued with a formal process to assess the market environment for strategic repositioning of its wireline business.

"Our wireless business continued to produce solid results this quarter, with our heritage markets showing good top-line and post-pay customer growth along with a reduction in post-pay churn," said Alltel President and CEO Scott Ford. "Our wireline business lost access lines, but added a record 41,000 net broadband customers during the quarter. Our strategic review process has gone well with significant interest expressed by several parties, and we are on pace to finalize our review before the end of the year."

Among other highlights for the third quarter:

• Total revenues were $2.5 billion, a 20 percent increase from a year ago. Net income under GAAP was $361 million, a 12 percent increase. Net income from current businesses was $331 million, a 17 percent increase from a year ago.
• Wireless revenue was $1.7 billion, a 30 percent increase from a year ago. Segment income was $376 million, a 31 percent increase.
• Average revenue per wireless customer (ARPU) in Alltel's heritage markets was $51.83 cents, a 5 percent increase. Post-pay churn in the heritage markets improved to 1.73 percent from 1.8 percent a year ago. Total ARPU was $53.78, which includes markets gained in the Western Wireless transaction. Post-pay churn companywide was 1.92 percent.
• The heritage markets recorded a net gain of 77,000 post-pay customers and lost 17,000 prepaid customers. The Western Wireless markets added about 28,000 net customers. Alltel lost 67,000 customers in its recently acquired markets, excluding Western Wireless. Total net customer additions were 21,000.
• Wireline revenue was $592 million, down 2 percent from the previous year. Segment income was $218 million, a 4 percent decline. The company added a record 41,000 broadband customers, bringing its total broadband customer base to 360,000. Average revenue per wireline customer was $67.21, a 2 percent increase.
• Equity free cash flow from current businesses was $404 million, a 25 percent increase. Net cash provided from operations was $659 million.

Alltel is a customer-focused communications company with more than 15 million customers in 36 states and nearly $10 billion in annual revenues.

Alltel claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events and results. Actual future events and results may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) adverse changes in economic conditions in the markets served by Alltel; the extent, timing, and overall effects of competition in the communications business; material changes in the communications industry generally that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; changes in communications technology; the risks associated with pending acquisitions and dispositions, including the pending acquisition of the Idaho markets and the pending dispositions of Western Wireless' Kansas and Nebraska markets and international assets; the risks associated with the integration of acquired businesses, including the integration of Western Wireless; the uncertainties related to any discussions or negotiations regarding the sale of any of the international assets or the wireline repositioning; adverse changes in the terms and conditions of the wireless roaming agreements of Alltel; the uncertainties related to Alltel's strategic investments; the effects of litigation; and the effects of federal and state legislation, rules, and regulations governing the communications industry. In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic conditions, and governmental and public policy changes.

For additional information contact:

Andrew Moreau 501-905-7962
Vice President - Corporate Communications
andrew.moreau@alltel.com

Rob Clancy 501-905-8991
Vice President - Investor Relations
rob.clancy@alltel.com

Alltel, NYSE: AT
www.alltel.com