DBRS Maintains ALLTEL Under Review-Developing Implications

Dominion Bond Rating Service (“DBRS”) has today maintained the ratings of ALLTEL Corporation (“ALLTEL” or the “Company”) “Under Review with Developing Implications” upon the announcement that ALLTEL intends to spin off its wireline business and merge it with VALOR Communications Group, Inc. (“VALOR”). Also, as a result of this proposed spin-off, ALLTEL’s remaining wireless business is expected to receive cash proceeds and debt reduction totalling about US$4.2 billion. This transaction is subject to approval by VALOR shareholders, federal and state regulators, and a letter ruling from the IRS approving the tax-free status on the exchange of ALLTEL wireline for VALOR shares. ALLTEL has indicated that they believe that this transaction could be completed by the end of June 2006.

DBRS will likely continue its review until the conclusion of the in-depth investigation being undertaken by the European Commission relating to the acquisition of ALLTEL’s Austrian operations (Tele.Ring) by T-Mobile Austria. DBRS wishes to have certainty on the transaction going through as initially proposed and that ALLTEL receives the US$1.6 billion of proceeds that will be used for debt reduction at ALLTEL’s wireless operations as indicated by the Company. The decision of the European Commission on this transaction is expected by the end of February 2006.

If the Tele.Ring sale goes through as planned, there is a high probability that DBRS will confirm ALLTEL’s long-term ratings at “A”, based on the expectation that no material changes will occur relating to the acquisition of Midwest Wireless Holdings (“Midwest”), which is expected to close in Q2 2006, and the current proposal for the spin-off of the wireline segment. This also reflects ALLTEL’s intention to repurchase US$3 billion of its own equity after the wireline spin-off is completed, that will likely result in net debt-to-EBITDA remaining strong at slightly over one times based on DBRS calculations. Even after this repurchase, DBRS expects that ALLTEL will have some of the strongest financial metrics in the U.S. wireless industry if all events unfold as the Company has indicated.

DBRS does acknowledge that ALLTEL will still remain the number five operator in the highly-competitive U.S. wireless industry, facing wireless operators with greater financial resources, larger distribution capabilities, and lower cost of customer acquisition. However, DBRS believes these limitations are offset by ALLTEL’s strong management team, history of focus on generating meaningful free cash flow, and maintaining an above-average capital structure. DBRS also notes ALLTEL’s current unique position in terms of wholesale roaming in its territory for both CDMA and GSM operators. ALLTEL also does not currently bundle its wireless offerings with its wireline operations, and through the proposed spin-off, new opportunities may now be available to the wireless segment that did not exist in the previous integrated configuration that could have caused cannibalization. Therefore, growth opportunities exist relating to local voice substitution, Voice over IP, as well as other data- and video-related services via wireless.

Details of the proposed wireline spin-off and the resulting ALLTEL wireless operation are as follows:

ALLTEL will spin off its wireline segment to existing shareholders, with one share of wireline and one residual share of ALLTEL. This new wireline share will then be acquired by VALOR for 1.05 VALOR shares, resulting in ALLTEL shareholders owning 85% of the new entity.

ALLTEL will also receive cash proceeds and debt reduction totalling US$4.2 billion resulting from the spin-off. The remaining ALLTEL wireless, which includes the impending acquisition of Midwest and the sale of International operations will have pro forma revenues of around US$7.5 billion, EBITDA of US$2.6 billion, and gross debt of approximately US$1.2 billion. The new entity will serve almost 11 million subscribers in 34 states.

ALLTEL then intends to implement a US$3 billion share repurchase plan over two years after the acquisition successfully closes. DBRS expects that gross debt could increase between US$1.5 billion to US$1.7 billion over the two-year period, although liquidity and coverage ratios will remain strong. However, DBRS does acknowledge that the Company has indicated that it could implement a US$1 billion debt reduction program as well.

Note: These ratings are based on public information.