T-Mobile has agreed to pay $4.4 billion to acquire UScellular’s 4.5 million retail wireless customers across 21 states, its retail stores and 30% of its wireless spectrum holdings.
Around $2 billion worth of the sales price involves the assumption of debt. (You can read the full earnings release here.)
Bellevue, Washington-based UScellular will retain its 2,100 cellular towers, with T-Mobile leasing space on them. T-Mobile will make job offers to a “significant number” of its employees, Light Reading reports.
The deal fits into T-Mobile’s plan of growing its retail wireless business through acquisition, with the $26 billion purchase of Sprint in 2020 and the recently closed $1.3 billion deal for Mint Mobile factoring in.
But with the Sprint deal currently painted with some revisionist regret on behalf of consumers, who are currently paying more in the U.S. for wireless service in its aftermath, regulatory approval could be dicey.
Also factor in that T-Mobile's spectrum holdings will exceed the ownership soft cap in certain markets.
Equity analyst Craig Moffett wrote this Tuesday morning: “Will the FCC and DOJ allow a transaction that will put T-Mobile above the FCC’s spectrum ownership ‘soft cap’ in select markets? We don’t know. But it is clear that spectrum concentration concerns are at the very top of the list of issues that made this transaction take so long to announce. The (negative) read-through for the spectrum market here is obvious.”
New Street Research policy expert Blair Levin, a former FCC official, believes the deal will ultimately be approved. But “given the current antitrust leadership,” he added in his own investor note, “the odds don’t reach the high level of certainly that they would at a prior time.
