A Verizon deal would value Alltel at eight times its earnings before interest, tax, depreciation and amortisation, compared with its November sale to private equity firms for about nine times EBITDA, the source said.
Some analysts said Verizon could be in a good position to refinance Alltel's debt at a lower interest rate; others said that a deal could also help Verizon create savings from a network and handset perspective.
That $27.5 billion deal in November 2007 was the largest ever private equity investment in the U.S. wireless industry, but it closed amid a mounting credit crisis that has curtailed the leveraged buyout boom.
Despite the surprise, analysts said the deal did make sense.
"Put simply, they can run Alltel more efficiently than Alltel can," said Bernstein analyst Craig Moffett.
Verizon Wireless and Alltel, which had more than 13 million customers at the end of the first quarter, together would have more than 80 million customers. AT&T ended the first quarter with about 71 million subscribers.
The two groups also use the same CDMA wireless network technology.