T-Mobile is buying US Cellular’s wireless operations and certain spectrum assets in a $4.4 billion deal. Once this deal goes through, it will further consolidate the cellular industry. The company expects to close the deal to purchase US Cellular.
The announcement of the deal caused its stock to rise 2% after hitting headlines. The expected closing date is mid-2025.
T-Mobile Gains 4 Million Customers
The purchase of US Cellular will help T-Mobile gain more than 4 million new customers. It will also enable T-Mobile to control US Cellular’s wireless operations and about 30% of spectrum assets across several spectrum bands.
T-Mobile CEO Mike Sievert said the deal will “create a better experience for all of our customers with more coverage and more capacity.”
T-Mobile Also Gains More Telecommunications Towers
As part of the deal, T-Mobile will enter into a new license agreement on at least 2,015 telecommunications towers owned by US Cellular.
The telecommunications company will also extend leases for about 600 towers that are already in use.
The Company Also Takes on US Cellular’s Debt
The deal includes a combination of cash and up to about $2 billion of assumed debt from US Cellular. “Up to $100 million of the cash component is contingent on hitting certain financial and operational metrics between the deal’s signing and closing,” according to the Associated Press (AP) News.
The boards of the United States Cellular Corp. and Telephone and Data Systems Inc., a majority shareholder of US Cellular, approved the deal.
Your Service Shouldn’t Falter
Don’t worry about seeing any interruption in service if you are a customer of US Cellular. Sure, AT&T customers saw their service drop earlier this year, but operations for US Cellular users should continue as normal.
Opportunities for customers to switch to T-Mobile’s lower-priced comparable plans with no switching costs will be available.
More Opportunities for US Cellular Customers
US Cellular customers will be provided access to T-Mobile’s “Uncarrier “ benefits with the deal, which includes content offers, additional savings for seniors, and an increase in customer service options.
The deal will also help expand coverage for customers and companies in rural areas in the US.
The Best Interests of Customers
“The decisions we announced today are in the best interests of our customers and our shareholders,” said U.S. Cellular Chief Executive Laurent Therivel (via MarketWatch).
“T-Mobile is the right partner for our wireless operations and will ensure that customers have access to best-in-class wireless speeds and performance, including 5G and a nationwide network, at compelling prices.”
US Cellular Looked to Sell in 2023
Before the deal, US Cellular served customers with about 4.5 million retail connections, operating in 21 states, owned 4,382 towers, and operated 6,995 cell cities in services.
However, the operation may have not been successful as US Cellular and Telephone and Data Systems said they were reviewing strategic options for the telecommunications company in August 2023.
The Shrinking Telecommunications Industry
T-Mobile’s purchase indicates that the telecommunications industry is beginning to consolidate, suggesting that more companies will either undergo acquisition or face bankruptcy soon due to fewer players and intensified competition.
“The writing is on the wall for the carriers and consolidation is now on the horizon and could speed up into 2025,” Wedbush Securities analyst Dan Ives said to AP News.
T-Mobile Is the Most Active Telecommunications Company
Among the major players in the telecommunications game, T-Mobile is the most active when it comes to mergers and acquisitions.
In 2013 and 2020, respectively, T-Mobile took over smaller rivals Sprint and MetroPCS Communications Inc. with the approval of the Federal Communications Commission.
The Best Choice for US Cellular Customers
“In the face of rising competition and increasing capital intensity required to keep pace with the latest technologies, and following our careful and deliberate strategic review, we are confident that continuing to deliver on our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” U.S. Cellular Chair LeRoy Carlson Jr. said in a statement.
With a reliable 5G network, US Cellular users will gain faster and better coverage thanks to this deal.
Future Consequences of This Merger
However, there are some negatives to the deal that could affect users like you. The deal could end up leaving customers with fewer options, meaning the prices could increase over time.
While this deal doesn’t violate antitrust laws in the US, the shrinking number of telecommunications could put the US in a pressure cooker where prices rise, service worsens, and customers hit their limits.
