U.S. Cellular Corp. and its parent company, Telephone and Data Systems Inc., announced on Tuesday that T-Mobile U.S. Inc. will acquire UScellular’s wireless operations and some spectrum assets for $4.4 billion, including about $2 billion in debt.
As part of this agreement, T-Mobile will sign a new license for at least 2,015 telecommunications towers owned by U.S. Cellular and extend leases on about 600 towers where T-Mobile is already a tenant.
UScellular customers will not experience any service interruptions and can switch to T-Mobile’s cheaper equivalent plans without any fees.
U.S. Cellular’s stock rose 1.3% in morning trading but dropped from an earlier gain of 13.4%, while TDS shares fell 1.7% after an initial increase of 10.2%.
T-Mobile’s stock rose 0.8%, nearing its record closing price of $167.42 from March 6, 2024.
U.S. Cellular CEO Laurent Therivel stated, “The decisions we announced today are in the best interests of our customers and our shareholders,” adding that T-Mobile will provide superior wireless speeds, 5G, and nationwide coverage at competitive prices.
The deal will also offer UScellular customers access to T-Mobile’s “Un-carrier” benefits, such as content offers, additional savings for seniors, and enhanced customer service options. It will significantly improve rural coverage for both companies’ customers.
Before the agreement, UScellular had around 4.5 million retail connections, including 4.1 million postpaid connections, operated in 21 states, owned 4,382 towers, and managed 6,995 cell sites in service.
T-Mobile plans to use its available cash to fund the deal, which is expected to close by mid-2025.
U.S. Cellular will retain about 70% of its spectrum assets and intends to monetize these assets strategically.
This deal follows a report by The Wall Street Journal stating that Verizon Communications and T-Mobile U.S. were in discussions to split U.S. Cellular, with T-Mobile expected to announce a deal in May. The report indicated that a deal with Verizon could take longer to finalize.
In August 2023, U.S. Cellular and Telephone and Data Systems began exploring strategic options for U.S. Cellular.
Year to date, U.S. Cellular’s shares have increased by 4.8%, TDS’s stock by 0.6%, T-Mobile’s stock by 4.4%, and the S&P 500 index by 11.3%.
