T-Mobile US, the second-largest mobile carrier in the US, has agreed to buy US Cellular’s wireless operations and some of its spectrum assets for roughly US$2.4 billion.
The deal includes US Cellular’s wireless customers, retail stores and 30 per cent of its spectrum assets, according to statements from the companies. T-Mobile said it’s paying a total of US$4.4 billion, which includes a combination of cash and as much as US$2 billion in assumed debt. The transaction is expected to close in mid-2025, pending regulatory approvals.
Shares of T-Mobile gained 1.4 per cent to US$168.32 at 10.06 am New York time. US Cellular shares were up 3.2 per cent at US$44.34. Its parent, Telephone and Data Systems also gained.
T-Mobile, alongside virtually all of its telecom rivals, has been facing intensifying competition for new business in a saturated wireless market. Meanwhile, it’s going head-to-head with cable providers offering bundled phone products to their video subscribers.
Despite that, T-Mobile has grown faster than peers by cashing in on a lead in fast 5G airwaves, adding more rural territories to its coverage area and selling wireless internet access in places where broadband choices are few.
T-Mobile expects to finance the US Cellular deal with existing cash. The company said it plans to offer to swap US$2 billion of US Cellular debt for T-Mobile debt.
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The Wall Street Journal reported earlier this month that Verizon and T-Mobile were in talks to buy portions of US Cellular, a carrier with more than 4 million wireless subscribers in 21 states and a market value of US$3.86 billion.
Two weeks ago, Verizon Communications’ consumer chief, Sowmyanarayan Sampath, said the company wanted to buy back US Cellular’s stake in its Los Angeles business if the companies could agree on a reasonable price. Verizon had long been eager to buy back the share, he said.
Following the closure of the deal, US Cellular will retain one of the largest tower businesses in the US, 70 per cent of its spectrum portfolio and significant investment interests, including its wireless partnerships.
Just last month, Bellevue, Washington-based T-Mobile reported quarterly earnings that beat analysts’ expectations and added more wireless phone subscribers than Wall Street had projected.
Also in April, T-Mobile won US approval to buy Mint Mobile, the budget wireless provider partly owned by actor Ryan Reynolds. The company had proposed to acquire Mint’s closely held parent company, Ka’ena Corp, with a combination of 39 per cent cash and 61 per cent stock in March 2023 in a deal valued at as much as US$1.35 billion. BLOOMBERG
