Alltel just announced a new service that will deliver XM Satellite Radio programming to phones on their network. Developed by MobiTV, the feature will allow users unlimited access to select XM radio channels for $7.99 a month.

“Having America’s largest wireless network, partner with America’s largest satellite radio provider was a natural fit, and we know our customers will enjoy XM’s stellar line-up of programming,” said Frank O’Mara, executive VP of sales and marketing for Alltel. While we’re not certain that Alltel is America’s largest wireless network, the service is certain to draw considerable attention from customers.

The service offers streams of 20 of XM’s most successful channels including: The 70s, 80s and 90s decades channels, Top 20 on 20 (Top 20 Hits), Ethel (New Alternative Rock), The City (Hip-Hop/R&B Hits), XMU (Indie Rock), Bluesville (Blues), Highway 16 (New Country Hits), and Viva (Latin Pop Hits). Like traditional XM receivers, the song data will be delivered to the handset.

XM currently provides for more than 7 million users. This latest team-up will, of course, increase their brand dominance several fold, but doesn’t it seem to defy the point of satellite radio? All this really does is feed XM through terrestial cellular circuits, making for the same shoddy signals that drive users to satellite radio in the first place. Seems sort of pointless… we’ll give it a go when we get a chance and report back on quality.

Alltel wireless launches XM service [Alltel Wireless]