The deal will put AT&T (T) that much closer to parity with Verizon (VZ), which surpassed AT&T to become the largest wireless carrier after its January acquisition of Alltell. Together, the two account for about 60 percent of all U.S. cellular subscribers. 

[Image Credit: IntoMobile]

Verizon (VZ) reported net income of $3.21 billion. Adjusted for one-time items, the company earned 63 cents a share. Analysts had expected 59 cents a share. It added 1.3 million new wireless customers, that number bolstered by the purchase of Alltel, and ended the quarter with 86.6 million mobile subscribers. Verizon’s FiOS fiber network is also doing quite well. It added 299,000 new subscribers, pushing the total to 2.2 million. (Click on graph below to enlarge.)

Quite a performance given the current economic climate.

And what of those rumors of an iPhone deal with Apple (AAPL)? During a conference call to discuss earnings, Verizon COO Denny Strigl declined comment but didn’t rule such a deal out: “We’re always open to discussions with any supplier,” he said, adding, “We have no announcements to make relative to Apple today. Historically we haven’t been dependent on any one device. We’ve been well-positioned with high-value customers.”

Translation: Do we look like a company in need of a Jesus phone?

No. I guess not.

With 1.6 million iPhones sold in its first quarter and 40 percent of those activated during that time new to its network, AT&T (T) sure does, though. Zing….

Verizon Communications (VZ) will acquire Alltel, the nation’s fifth largest wireless-phone company, for $28.1 billion. Assuming the deal passes antitrust scrutiny, it will create a monstrosity of a wireless carrier with about 80 million subscribers–9 million more than AT&T (T), the nation’s largest cellphone company.

A savvy move for Verizon, which has clearly overcome whatever jitters caused it to sit out the Alltel auction in the spring of 2007. “Put simply, they can run Alltel more efficiently than Alltel can,” said Bernstein analyst Craig Moffett. “It takes a strong wireless franchise, and increases Verizon’s exposure to wireless, which is the best business in their portfolio. It lets them exercise their advantages of scale to run the business.”

Among the more than 260 applicants included on the bidder list released last night by the FCC (accepted applications; incomplete applications) are AT&T, Verizon Wireless, Cox Communications, Google (bidding as Google Airwaves Inc.), MetroPCS, Qualcomm, National Datacast (the for-profit subsidiary of the Public Broadcasting Service), Alltel, Towerstream, Chevron and Frontier Wireless (EchoStar).

And then there’s zillionaire investor Paul Allen–Microsoft’s other founder (pictured above). Applications from Vulcan Spectrum LLC and Bend Cable Communications LLC, both Allen-backed ventures, have been accepted by the FCC. Seems Allen fancies himself the Pied Piper of the Wired World, and the Wireless World as well. Perhaps someday we’ll have the Paul Allen Brain Atlas, the Paul Allen Telescope Array and the Paul Allen Advanced Wireless Services Spectrum.