As UScellular proceeds with a proposed $4.4 billion acquisition of its wireless operations by T-Mobile US—which would essentially turn the mobile network operator into an infrastructure company—the last of the large regional MNOs has struck a deal to sell some of its remaining spectrum assets to Verizon for a billion dollars.
UScellular said that it has also made deals with two other MNOs for the sale of other spectrum, as part of its efforts to “opportunistically monetize” the spectrum that was not included in the proposed sale to T-Mobile US.
The spectrum deal with Verizon would involve the national carrier buying 663 million megahertz POPs of UScellular’s 850 MHz spectrum licenses, as well as 19 million MHz POPs of its PCS licenses and 11 million MHz POPs of its AWS airwaves, for a total consideration of $1 billion.
T-Mobile US, meanwhile, will pick up the majority of UScellular’s 700 MHz A block, AWS and PCS airwaves plus all of USM’s 600 MHz, 2.5 GHz and 24 GHz spectrum, if the acquisition transaction is approved.
UScellular also said that it has agreements with two other mobile network operators to see 12 million MHz POPs of its spectrum in the 700 MHz B and C blocks, and in the C-Band and Citizens Broadband Radio Service (CBRS) shared spectrum.
UScellular has not announced either the potential buyers or the financial terms for those latter transactions. For reference, in the C-Band auction, US Cellular spent $1.46 billion for 252 C-Band licenses in 99 geographic areas that covered 94% of its subscribers in the 21 states where it operates. It spent another $13.5 million on CBRS Priority Access Licenses (PALs).
All of the transactions would be subject to regulatory approvals and closing conditions, and all of them are also contingent on the proposed sale of UScellular’s wireless operations to T-Mobile US.
After the transactions, UScellular said that it would still hold 3.4 billion MHz POPs of low- and mid-band spectrum in the C-Band, CBRS and 3.45 GHz bands, as well as 700 MHz; and 17.2 billion MHz POPs of millimeter-wave spectrum holdings.
“We are pleased that significant value for a portion of the remaining licenses will be realized, and, importantly, that these agreements with multiple mobile network operators ensure that this spectrum will be put to work for consumers throughout the country,” said UScellular President and CEO Laurent Therivel, who added that the company will continue its process of opportunistic sales of the spectrum that remains.
UScellular will also 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. UScellular and T-Mobile US have 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 if the transaction is approved.
