T-Mobile US announced a plan to acquire most of UScellular’s wireless assets, which includes customers, stores and 30 per cent of its spectrum in a deal valued at $4.4 billion.

UScellular will retain ownership of the remainder of its spectrum, equity-method investments and 4,400 towers.

T-Mobile plans to fund the deal using a combination of cash and up to $2 billion of debt to be assumed through an exchange offer to be made to some of UScellular’s debt holders.

It will enter into a new licence agreement on more than 2,000 UScellular towers and extend existing leases on around 600 others.

A representative from T-Mobile told Mobile World Live it is acquiring all of UScellular’s 600MHz, 2.5GHz and 24GHz spectrum bands as well as the majority of its 700MHz A Block, AWS and PCS holdings.

UScellular stated it will seek to “opportunistically monetise” its remaining spectrum assets.

Roger Entner, founder and analyst at Recon Analytics, told Mobile World Live it is a three-horse race between AT&T, T-Mobile and Verizon on buying the remaining UScellular spectrum. He noted the Federal Communications Commission will likely look at the sell-off on a market-by-market basis.

Telephone and Data Systems (TDS) owns an 83 per cent stake in UScellular, which is the fourth largest US mobile operator. The Carlson family owns the majority of TDS.

“T-Mobile is getting it pretty cheap at $4 billion,” Entner said. “It would have cost double or triple that years ago because the family that controls UScellular didn’t want to give it up”.

UScellular has 4.5 million wireless subscribers across 21 US states. A large chunk of those customers are in rural areas, but in its latest earnings call UScellular president and CEO Laurent Therivel said it was losing mobile subscribers to cable company-run MVNOs.

In its statement today (28 May), Therivel explained the deal with T-Mobile will give its customers “access to best-in-class wireless speeds and performance, including 5G and a nationwide network, at compelling prices”.

Those customers will be able retain current tariffs or switch to an unlimited T-Mobile plan of their choice without incurring a switching charge.

The two operators expect the deal to close in mid-2025 subject to regulatory approvals and other closing conditions.

Entner noted T-Mobile has a lot of experience integrating assets after previous deals to buy Sprint in 2020 and Mint Mobile in May.

The boards of both UScellular and TDS announced in August 2023 they were considering the partial sale of some of the mobile operator’s assets.