T-Mobile (NASDAQ: TMUS) and UScellular (NYSE: USM) have announced a major agreement in which T-Mobile will acquire the majority of UScellular’s wireless operations. This acquisition includes UScellular’s wireless customers, retail stores, and specific spectrum assets.
Enhancing 5G Network and Customer Experience
Upon completion of this transaction, T-Mobile’s 5G network will expand, providing millions of UScellular customers, especially those in underserved rural areas, with superior connectivity. This transition will allow UScellular customers to move from a limited roaming experience to full nationwide access on T-Mobile’s extensive and fast 5G network. Additionally, UScellular customers will benefit from T-Mobile’s value-packed plans, perks, and high-quality customer support, potentially saving them hundreds of millions of dollars. T-Mobile customers will also gain access to UScellular’s network, improving coverage in previously limited areas.
T-Mobile’s CEO Perspective
Mike Sievert, CEO of T-Mobile, stated, “This deal allows us to extend our Un-carrier value and experiences to millions of UScellular customers, offering them lower-priced, value-packed plans and better connectivity on our best-in-class 5G network. Both companies’ customers will benefit from enhanced coverage and capacity, pushing our competitors to keep up, ultimately benefiting more consumers. The Un-carrier ethos is about shaking up wireless for the better, and this deal furthers that mission.”
UScellular’s CEO Insights
Laurent Therivel, CEO of UScellular, commented, “T-Mobile’s acquisition and integration of our wireless operations will provide rural Americans with best-in-class connectivity through enhanced nationwide coverage and compelling service offerings. This transaction offers our customers better coverage and speeds, unlimited texting in over 215 countries, content offers, device upgrades, and other T-Mobile benefits.”
Superior Network Experience
The combined spectrum and assets will deliver an improved connected experience on T-Mobile’s nationwide 5G network, offering enhanced performance, coverage, and speed. Customers in underserved rural areas will particularly benefit from faster and more reliable 5G service.
Value-Packed Plans
UScellular customers will have the option to retain their current plans or switch to a T-Mobile plan with no switching costs, gaining access to T-Mobile’s popular Un-carrier benefits, such as streaming and free international data roaming. Switching to T-Mobile could save UScellular customers hundreds of millions annually, with additional savings from plans like T-Mobile’s 5G Unlimited 55+ options. All customers will also enjoy T-Mobile’s award-winning customer service and improved retail support.
Increased Choice and Competition
This acquisition will introduce more choice in areas with expensive and limited plans from AT&T and Verizon, and in regions with few home broadband options. By leveraging the combined spectrum and wireless assets, T-Mobile will enhance competition and expand its home broadband offerings, further bridging the digital divide for customers in UScellular’s footprint.
Proven Integration Strategy
T-Mobile has a history of successful integrations, such as with MetroPCS in 2013 and Sprint in 2020, both of which enhanced competition and benefited consumers. T-Mobile will apply this successful playbook to deliver exceptional value and experiences to more people nationwide, encouraging competitors to improve as well.
Transaction Details and Financial Impact
T-Mobile will pay approximately $4.4 billion for UScellular’s assets, including up to $2.0 billion in assumed debt. If some debtholders do not participate in the exchange, the cash portion of the purchase price will increase accordingly. Post-transaction, UScellular will retain its other spectrum and towers, with T-Mobile leasing space on at least 2,100 towers. T-Mobile does not anticipate this transaction will affect its 2024 guidance or shareholder return program. The integration is expected to yield approximately $1.0 billion in annual cost synergies, with a total integration cost estimated between $2.2 billion and $2.6 billion. T-Mobile plans to reinvest part of these synergies to enhance consumer choice, quality, and competition in the wireless industry.
