The News: T-Mobile and UScellular announced that T-Mobile has agreed to acquire substantially all of UScellular’s wireless operations, including UScellular’s wireless customers, stores, and certain specified spectrum assets. The deal is expected to close in mid-2025. Read the full press release on the T-Mobile website.
T-Mobile Acquires UScellular Wireless Ops: A Boon to Rural Areas and Competition
Analyst Take: T-Mobile will pay approximately $4.4 billion for the assets being acquired from UScellular. The transaction will be a combination of cash and up to $2.0 billion in debt taken by T-Mobile through an exchange offer to certain UScellular debtholders before closing. Upon closing, T-Mobile’s 5G network will expand to serve UScellular’s customers, especially those in underserved rural areas, by moving from a roaming experience outside of the UScellular coverage areas to nationwide access.
As a result, UScellular’s customers will be able to join T-Mobile plans and receive service support. T-Mobile customers will also gain access to UScellular’s network in previously underserved areas that previously had limited coverage and the benefit of enhanced performance throughout UScellular’s footprint
T-Mobile UScellular Deal: Key Details
T-Mobile will acquire about 30% of UScellular’s wireless spectrum while UScellular retains 4,400 owned towers and approximately 70% of its wireless spectrum portfolio. The deal allows T-Mobile to sign new long-term leases on at least 2,015 UScellular-owned towers and extend leasing on about 600 others.
In my view, UScellular’s customers gain a solid anchor tenant into the foreseeable future after the deal closes for T-Mobile’s 5G standalone (SA) nationwide network. This includes unlimited texting in more than 215 countries, diversified content offers, device upgrades, and other T-Mobile benefits.
T-Mobile expects that the transaction will result in approximately $1.0 billion in effective operational expenditure (OpEx) and capital expenditure (CapEx) annual run rate cost synergies upon integration. The total cost to achieve the integration is currently estimated at between $2.2 billion and $2.6 billion.
T-Mobile M&A Acumen Bodes Well for UScellular Deal
I am encouraged about the deal’s prospects as T-Mobile has demonstrated its merger and acquisition (M&A) acumen in successfully executing major transactions. In April, the US FCC approved T-Mobile’s $1.35 billion acquisition of Ka’ena, the parent company of Mint Mobile and Ultra Mobile. In 2020, after intense scrutiny by regulators, T-Mobile acquired Sprint for $26 billion. This bodes well for T-Mobile’s ability to complete the pending UScellular deal with the approval of the US regulatory bodies.
Before T-Mobile’s announcement, there was heavy speculation that Verizon would partner with T-Mobile in taking over a sizable portion of UScellular’s wireless spectrum. However, such speculation is entirely irrelevant because any Verizon role did not materialize. I believe that the UScellualr deal will provide T-Mobile with subscriber and channel breakthroughs as well as a competitive edge over rivals, particularly across the UScellular customer and coverage footprint.
T-Mobile Ready to Inject Much-Needed Competition Across Rural Areas
Now, I anticipate that Verizon and AT&T will need to start planning how to counter the T-Mobile UScellular deal in key areas such as price adjustments, modifications to existing and new service plans, and spectrum optimization related to serving rural customers, at least within the UScellular footprint.
The additional capacity and coverage generated by the combination of T-Mobile/UScellular spectrum and wireless assets and capabilities can stimulate competition for wireless services across rural areas, particularly concerning Verizon and AT&T service offerings. Of key importance, T-Mobile also becomes better positioned to help close the digital divide across challenging rural environments, fulfilling the society-wide goal of eliminating disparities in the availability of broadband services.
Key Takeaway: T-Mobile Moves the Needle in US Wireless Rural Coverage and Competition
I believe that the T-Mobile UScellular deal will inject much-needed competition into the US wireless services market segment across underserved rural areas, help reduce the US digital divide, and strengthen T-Mobile’s overall competitiveness through its expanded coverage and customer footprint. As a result, both T-Mobile and UScellular customers are poised to reap the benefits of expanded coverage and footprint, providing more choice and flexibility in meeting their distinct wireless demands.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Ron is an experienced, customer-focused research expert and analyst, with over 20 years of experience in the digital and IT transformation markets, working with businesses to drive consistent revenue and sales growth.
Ron holds a Master of Arts in Public Policy from University of Nevada — Las Vegas and a Bachelor of Arts in political science/government from William and Mary.
