T-Mobile to Buy UScellular for $4.4 Billion

WASHINGTON, May 28, 2024 – T-Mobile announced on Tuesday the company agreed to buy UScellular’s wireless operations and nearly a third of its spectrum holdings for $4.4 billion.

T-Mobile will add more than 4 million customers to its postpaid phone footprint, which stood at 76.5 million as of the company’s first quarter earnings report. T-Mobile will also scoop up spectrum in the 24 gigahertz, 2.5 GHz, 600 and 700 MHz, AWS, and PCS bands. 

The company is paying for all that with a combination of cash and about $2 billion in assumed debt.

UScellular will retain 70 percent of its spectrum holdings, including in the 3.45 GHz and CBRS bands. The company is looking to “opportunistically monetize” that spectrum and will start doing so “almost immediately,” CEO Laurent Therivel said on a conference call Tuesday.

UScellular will also hold on to its nearly 4,400 towers. As part of the deal, T-Mobile will enter 15-year lease agreements on at least 2,015 of those towers and extend leases on the 600 towers where the company is already a tenant.

Therivel said large national carriers expanding into rural areas, which make up nearly 40 percent of U.S. Cellular’s footprint, and the ballooning costs of 5G spectrum and network equipment presented barriers for the company.

“Large national players have expanded into rural America. That creates significant competition, where previously there might have been only a few players,” he said. “Delivering on our mission requires a level of scale that is best achieved by combining our wireless operations with a national player.”

UScellular customers will be able to stay on their current plan or switch to an unlimited T-Mobile plan with no switching costs, Therivel said.

The companies expect the deal to close in mid-2025, provided regulators approve. As part of an effort to get that regulatory approval, Threvier said T-Mobile is expected to offer jobs to “a significant number of UScellular associates following the transaction.”

T-Mobile acquired Mint Mobile last year for more than $1.3 billion and merged with Sprint in 2020, a move that Finnish telecom research firm Rewheel found helped keep U.S. mobile prices among the highest in the world.

Tuesday's move does further consolidate the wireless industry and will likely draw regulatory attention. But industry analysts at New Street Research said in a note to investors that UScellular is likely not large enough for the deal to be nixed on antitrust grounds. 

The research house wrote that the Federal Communications Commission might find that T-Mobile would come to control too much spectrum in certain areas, but it predicted the agency would in that case seek concessions rather than block the deal entirely.

The Wall Street Journal reported earlier this month that both Verizon and T-Mobile were in talks to buy up UScellular, but only Tuesday’s deal with T-Mobile has been announced so far.