T-Mobile is buying U.S. Cellular’s wireless operations and certain spectrum assets in a deal valued at $4.4 billion, and further consolidating the industry.
T-Mobile would get more than 4 million new customers and control of U.S. Cellular’s wireless operations and about 30% of spectrum assets across several spectrum bands. T-Mobile will also enter into a new master license agreement on more than 2,000 towers and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant.
T-Mobile CEO Mike Sievert said the deal will “create a better experience for all of our customers with more coverage and more capacity.”
T-Mobile is among the more active companies in telecommunications with regard to mergers and acquisitions. And in 2020 T-Mobile completed the takeover of smaller rival Sprint. In 2013 the Federal Communications Commission approved its merger with MetroPCS Communications Inc.
T-Mobile said Tuesday that U.S. Cellular customers will gain access to its 5G network, giving them better coverage and speed. The company said the deal will particularly benefit those that live in underserved rural areas of the country.
“In the face of rising competition and increasing capital intensity required to keep pace with the latest technologies, and following our careful and deliberate strategic review, we are confident that continuing to deliver on our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” U.S. Cellular Chair LeRoy Carlson Jr. said in a statement.
T-Mobile said that U.S. Cellular customers will be able to remain on their current plans or switch to an unlimited T-Mobile plan of their choice. They will not incur switching costs if a plan change is made.
The transaction includes a combination of cash and up to about $2 billion of assumed debt. Up to $100 million of the cash component is contingent on hitting certain financial and operational metrics between the deal’s signing and closing.
U.S. Cellular will keep about 70% of of its spectrum portfolio across several spectrum bands.
The deal has been unanimously approved by the boards of United States Cellular Corp. and Telephone and Data Systems Inc, which is a majority shareholder of U.S. Cellular. It is expected to close in mid-2025.
U.S. Cellular’s stock jumped more than 12% before the opening bell on Tuesday, while shares of Telephone and Data Systems surged more than 17%.
In a major move that is set to shake up the telecommunications industry, T-Mobile has announced its acquisition of a majority stake in US Cellular for a whopping $4.4 billion, including debt. This deal marks a significant milestone for T-Mobile as it looks to expand its reach and solidify its position as a major player in the US market.
The acquisition of US Cellular, which is the fourth-largest wireless carrier in the US, will give T-Mobile access to a larger customer base and a wider network coverage. This move is part of T-Mobile’s strategy to compete with its larger rivals, Verizon and AT&T, who currently dominate the US market.
With this acquisition, T-Mobile will be able to offer its customers a more comprehensive range of services and products, including faster data speeds, improved coverage, and better customer service. This will help T-Mobile attract more customers and increase its market share in the highly competitive telecommunications industry.
The $4.4 billion price tag for the acquisition includes both cash and assumption of debt. This shows T-Mobile’s commitment to investing in its future growth and expanding its operations in the US. The deal is expected to close in the coming months, pending regulatory approval.
T-Mobile’s CEO, John Legere, expressed his excitement about the acquisition, stating that it will help T-Mobile become a stronger competitor in the US market. He also highlighted the potential for synergies between T-Mobile and US Cellular, which will benefit both companies and their customers.
Overall, T-Mobile’s acquisition of a majority stake in US Cellular is a bold move that signals the company’s ambition to become a major player in the US telecommunications industry. With this deal, T-Mobile is poised to take on its larger rivals and drive innovation and competition in the market. It will be interesting to see how this acquisition plays out in the coming months and how it will impact the overall landscape of the telecommunications industry.
