T-Mobile chief executive Mike Sievert said the deal will ‘create a better experience for all of our customers with more coverage and more capacity’
T-Mobile is set to acquire US Cellular’s wireless operations and certain spectrum assets in a $4.4billion deal, further tightening its grip on the telecom industry.
The move will see T-Mobile welcoming over 4 million new customers and taking control of US Cellular’s wireless operations along with roughly 30% of its spectrum assets across various bands. Additionally, T-Mobile will enter a fresh master license agreement for more than 2,000 towers and extend leases for around 600 towers where it’s already a tenant.
T-Mobile’s chief, Mike Sievert, has hailed the acquisition as a game-changer, stating it will “create a better experience for all of our customers with more coverage and more capacity.” Notably active in the mergers and acquisitions arena, T-Mobile previously sealed the deal on its smaller competitor Sprint in 2020 and merged with MetroPCS Communications Inc. in 2013 after getting the green light from the Federal Communications Commission.
On Tuesday, T-Mobile announced that the integration with US Cellular would allow its customers to tap into an enhanced 5G network, promising improved coverage and speed, especially for those in rural areas that are typically underserved.
“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,” US Cellular Chair LeRoy Carlson Jr. said in a statement.
T-Mobile has assured that US Cellular customers can stick with their existing plans or opt for an unlimited T-Mobile plan without incurring any costs for switching. The deal involves a mix of cash payment and assuming up to about $2billion in debt.
Additionally, up to $100million of the cash portion depends on achieving certain financial and operational targets from the time of signing until the completion of the deal. US Cellular will retain roughly 70% of its spectrum holdings across various frequency bands.
The transaction has received unanimous backing from the boards of United States Cellular Corp. and Telephone and Data Systems Inc., which holds a majority stake in US Cellular, and is slated to be finalised by mid-2025. Following the announcement, US Cellular’s shares saw an over 12% spike before market opening on Tuesday, while Telephone and Data Systems’ stock soared by more than 17%.
