UScellular will become a wireless infrastructure company, retainings its tower assets and about 70% of its spectrum
T-Mobile US plans to buy UScellular’s wireless operations and about 30% of the smaller operator’s spectrum assets across multiple bands. This move takes the last of the large, regional U.S. operators out of the retail wireless business and turns it into a wireless infrastructure company.
T-Mo will buy the spectrum, UScellular’s subscribers, operations and network assets except for the company’s owned towers.
UScellular will retain the nearly 4,400 towers that it owns, as well as about 70% of its spectrum and its equity method investments including its wireless partnerships, which the company said generated about $158 million in income last year.
UScellular is the fifth largest tower company in the United States, and this deal solidifies that position. The two companies said that they are going to put together a new, 15-year master lease agreement under which T-Mo will become a long-term tenant on at least 2,600 of UScellular’s towers, guaranteeing the company an income stream for years to come. T-Mobile US is already a tenant on about 600 of UScellular’s towers, and it will become a tenant on at least another 2,105 sites after the deal.
UScellular said that it “will seek to opportunistically monetize these retained assets.”
In terms of spectrum, T-Mo is picking up complementary pieces to its portfolio, including all of UScellular’s 600 MHz, 2.5 GHz and 24 GHz spectrum, and the majority of its 700 MHz A block, AWS and PCS airwaves.
UScellular will retain some of its 700 MHz spectrum and its midband holdings in the C-Band, 3.45 GHz and CBRS band, as well as a significant amount of millimeter-wave spectrum. The chart below lays out what spectrum assets are being sold vs. kept; it is part of a UScellular presentation to investors outlining details of the deal.
T-Mobile US will make the purchase through a combination of cash and up to about $2 billion of assumed debt. The agreement has been unanimously approved by the boards of directors of both UScellular and its majority owner, TDS.
“For over 40 years, UScellular has delivered on its mission of connecting people to what matters most, and this transaction will ensure customers have access to the level of service they deserve,” said LeRoy T. Carlson Jr., chair of the board of directors of UScellular. “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. T-Mobile has the resources to provide UScellular’s customers with an unparalleled network experience, lower prices and higher-quality services. We are pleased that T-Mobile also shares our commitment to bringing best-in-class connectivity to rural Americans, who today comprise nearly 40% percent of the population that UScellular serves.”
“The decisions we announced today are in the best interests of our customers and our shareholders. T-Mobile is the right partner for our wireless operations and will ensure that customers have access to best-in-class wireless speeds and performance, including 5G and a nationwide network, at compelling prices,” said Laurent Therivel, UScellular’s CEO. “We are committed to serving the needs of our customers and supporting our associates as we work to complete the transaction.”
“This deal will create opportunity for T-Mobile to bring millions of UScellular customers lower prices and the Un-carrier’s superior value on our best-in-class nationwide 5G network, offering much needed choice and more real competition across the wireless industry,” said T-Mobile US CEO Mike Sievert. “Bringing together UScellular’s network resources with ours will enable us to fill gaps in connectivity that will create a better experience for all of our customers with more coverage and more capacity. And this is just some of the goodness this deal will bring. This will be a real win for consumers across the U.S.”
