NEW YORK The Federal Communications Commission voted on Tuesday to approve a Verizon Wireless plan to buy Alltel Corp for $28.1 billion and Sprint Nextel Corp's proposed joint venture with Clearwire Corp.
After their deal, Verizon Wireless will overtake AT&T Inc as the biggest U.S. mobile service. Sprint and Clearwire plan to combine their resources to build a high-speed wireless network with investments from companies such as Comcast Corp, Intel Corp and Google Inc.
The U.S. telecommunications regulator said Verizon Wireless, owned by Verizon Communications Inc and Vodafone Group Plc, could go ahead with its Alltel purchase as long as it divests airwaves in 105 markets.
Banc of America analyst David Barden estimated the markets expected to be divested served about 2 million of Alltel's 13.8 million subscribers at the end of the third quarter.
The vote follows antitrust approval from the U.S. Justice Department on October 30, with the condition the company divests assets in 100 markets in 22 states.
Sprint said it received DoJ approval for the venture in August, but Clearwire shareholders needed to vote on the deal on November 20 before it could be finalized.
The companies announced their $14.5 billion venture in May and their plan to build a network based on WiMax, which promises to blanket entire cities with high-speed wireless access for everything from cameras to computers.
Verizon Wireless announced plans in June to buy privately held Alltel Corp in a deal that values Alltel's equity at $5.9 billion and involves Verizon Wireless taking on about $22.2 billion of Alltel debt.
Verizon said in its recent earnings conference call that the costs of the deal would be higher than expected due to tight credit markets, but it did not give specific details.
Verizon Wireless spokeswoman Robin Nicol said the next step was for the company to review the FCC order.
"We're now working through the final steps and we continue to work to complete the transaction as soon as is practical," Nicol added.
(Reporting by Kim Dixon in Washington, D.C., writing by Sinead Carew in New York, editing by Richard Chang and Andre Grenon)