UScellular will sell a chunk of its remaining spectrum assets to AT&T for a little more than $1 billion in cash, including 1,250 million MHz-POPs of 3.45 GHz and 331 million MHz-POPs of 700 MHz B/C block licenses.
“We are pleased with the significant value that will be realized in the various transactions recently announced,” said UScellular President and CEO Laurent Therivel. “This agreement adds a fourth mobile network operator, in addition to T-Mobile, to the list of those whose subscribers will benefit from the sale of our spectrum licenses. As with the other mobile network operators, we are confident that AT&T can put it to productive use in communities throughout the U.S. Furthermore, the terms of the agreement will ensure that there will be continued, uninterrupted service for UScellular customers in the interim.”
UScellular said that the transactions it has announced thus far with AT&T, Verizon and two other operators, account for about 55% of its spectrum holdings on a per megahertz-POP basis—excluding its millimeter-wave spectrum. That, plus UScellular’s pending transaction to sell its wireless operations to T-Mobile US, means that the company has approximately 30% of its holdings, minus mmWave, left.
“After our proposed sales, we will be left with 1.86 billion MHz-Pops of low and mid-band spectrum, as well as 17.2 billion MHz-Pops of mmWave spectrum, with the substantial majority of retained value in the C-band spectrum,” added Therivel.
“The C-band licenses have a number of attributes that we believe are favorable to their long-term value,” he continued. “First, our C-band licenses are positioned in an attractive mid-band frequency that can deliver outstanding speed and capacity. Second, there is a substantial 5G ecosystem of equipment vendors and existing infrastructure that uses C-band. Finally, they have a lengthy build-out timeline, with first and second build-out dates of 2029 and 2033, respectively. This provides ample time and optionality for us to either monetize or deploy the spectrum in the future. We will continue to look for ways to opportunistically monetize the C-band, as well as the other remaining spectrum.”
UScellular’s majority shareholder, TDS, has already consented to the AT&T spectrum transaction. Like the other spectrum transactions, this one is contingent upon the successful closing of T-Mobile US’ acquisition of UScellular’s wireless operations.
UScellular recently reported a continued downward slide in its total operating revenues, service revenues and net income, as it proceeds with selling assets and shifting its business into being a telecom infrastructure provider rather than a mobile network operator. However, Fixed Wireless Access (FWA) customer base continues to grow, up 32% year-over-year to 140,000.
Therivel told analysts on the company’s quarterly call that UScellular believes that the proposed sale of its wireless operations to T-Mobile US is on track to close in mid-2025.
T-Mobile US plans to buy a portion of UScellular’s spectrum, plus its wireless subscribers, operations and network assets except for the company’s owned towers for about $4.4 billion. 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 would solidify that position. The two companies 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 after the deal.
Separately, UScellular struck another deal with Verizon to sell some of its remaining spectrum for about $1 billion. 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.
