American telecommunications provider T-Mobile announced it will buy and acquire all of UScellular’s wireless operations, including its customers and stores, as well as specified spectrum assets in a deal worth US$4.4 billion.
In a statement, T-Mobile said the deal includes cash and up to US$2 billion of debt. In a separate press release, UScellular said up to US$100 million of the deal’s portion depends on certain financial and operating metrics being met between its signing and closing. The price is subject to other potential adjustments, it added.
The UScellular release stated T-Mobile will acquire 30% of UScellular’s wireless spectrum as part of the deal.
The spectrum will be used to improve coverage in rural areas in the US and offer better connectivity to customers, the companies say.
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Both say UScellular will retain 70% of its wireless spectrum towers and will lease space on at least 2,100 additional towers to T-Mobile.
“The company will retain 70% of its spectrum portfolio – a trove of assets that is most likely to be negotiated in the spectrum secondary market,” commented GlobalData Americas research director Jesus Romo.
“UScellular aims to keep strategic mid-band frequencies, including licenses from the 3.45GHz and C-Band, as well as mmWave capacity that could receive interest from FWA operators, a market now projected to exceed 20 million accesses by 2028, according to GlobalData’s estimates.”
Part of the deal will allow T-Mobile to sign new long-term leases on at least 2,015 UScellular-owned towers and extend the lease on 600 other properties.
“This will ensure continued, uninterrupted service for UScellular customers following the transaction and create a long-term contracted revenue stream from a strong anchor tenant for at least 15 years after the close of the transaction,” UScellular said.
CNBC, quoting a report from The Wall Street Journal, said in earlier May T-Mobile and Verizon were in talks to “carve up” UScellular’s wireless spectrum but a deal with Verizon could take longer or won’t push through.