U.S. Cellular is being acquired by T-Mobile for $4.4 billion. However, the carrier is keeping its cell towers valued at between $2.5 and $3 billion. The structures have an average 1.6 tenancy rate. In August, the carrier’s stock almost doubled when it was announced that the company was being readied to be put on the auction block.
In a strategic move within the telecom industry, T-Mobile has announced an agreement to purchase U.S. Cellular’s wireless operations and select spectrum assets for $4.4 billion. This deal, which combines cash and up to $2 billion of assumed debt, is a significant step in T-Mobile’s ongoing expansion strategy, bolstering its position in the market following its recent acquisition of Mint Mobile.
The acquisition encompasses “substantially all” of U.S. Cellular’s wireless operations, including its customers and retail stores. It will provide U.S. Cellular customers access to T-Mobile’s extensive 5G network and service plans.
The boards of both U.S. Cellular and its parent company, Telephone and Data Systems, Inc. (TDS), have given their approval, and the transaction is anticipated to close by mid-2025, pending regulatory approvals.
Crucially, U.S. Cellular will maintain ownership of approximately 4,400 towers and about 70% of its spectrum portfolio. The company plans to monetize these remaining assets while retaining significant investment interests, including its wireless partnerships. This retention positions U.S. Cellular as one of the largest tower operators in the U.S., ensuring continuity and stability for its existing infrastructure.
According to Wireless Estimator statistics, U.S. Cellular is the fifth largest tower owner in America.
T-Mobile CEO Mike Sievert emphasized the benefits of the merger for consumers, stating, “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up — and even more consumers will benefit.”
U.S. Cellular CEO Laurent Therivel echoed this sentiment, highlighting that the deal would offer customers better coverage and speeds and additional T-Mobile benefits such as unlimited texting in over 215 countries, content offers, and device upgrades.
Despite the acquisition, U.S. Cellular dismissed any speculation about further transactions, maintaining a focus on evaluating the best outcomes for shareholders. Notably, the deal includes provisions for T-Mobile to extend leases for approximately 600 U.S. Cellular towers and sign new agreements for at least 2,015 more, ensuring a seamless transition and continued operation of existing infrastructure.
The telecom industry has seen increasing competition, with significant players vying for market share in a saturated wireless market. Using its advanced 5G capabilities, T-Mobile has been expanding its coverage, particularly in rural areas, and offering wireless internet access where broadband options are limited. This strategy has enabled T-Mobile to grow faster than its competitors despite the intense rivalry from both telecom and cable providers.
T-Mobile can now access U.S. Cellular’s 600MHz, PCS, and AWS spectrum licenses – those that T-Mobile is already using in its own network.
Market reactions to the announcement were positive, with T-Mobile’s shares rising 1.4% to $168.32 and U.S. Cellular’s shares increasing by 3.2% to $44.34. The parent company, Telephone and Data Systems, also saw a gain in its share value.