T-Mobile will buy almost all US cell phones

T-Mobile is buying US Cellular’s wireless operations and certain spectrum assets in a deal valued at $4.4 billion, further consolidating the industry.

T-Mobile would gain more than 4 million new customers and control US Cellular’s wireless operations and about 30% of spectrum assets across several spectrum bands. T-Mobile will also enter into a new master license agreement for more than 2,000 towers and extend the lease term for approximately 600 towers where T-Mobile is already a tenant.

T-Mobile CEO Mike Sievert said the deal “will create a better experience for all of our customers, with more coverage and more capacity.”

It could also mark the beginning of greater consolidation in an industry with fewer players than ever before. “The writing is on the wall for operators and consolidation is now on the horizon and could accelerate through 2025,” said Dan Ives, analyst at Wedbush Securities. “This is the first shot in the arm in the wireless world and we expect more deals over the next year.

T-Mobile is among the most active companies in telecommunications when it comes to mergers and acquisitions. In 2020, T-Mobile completed the acquisition of a smaller rival Race. And in 2013 the Federal Communications Commission approved its merger with MetroPCS Communications Inc.

T-Mobile said Tuesday that US Cellular customers will have access to its 5G network, providing them with better coverage and speeds. The company said the deal will particularly benefit those living in underserved rural areas of the country.

“In the face of increasing competition and the increased capital intensity required to keep up with the latest technologies, and following our careful and deliberate strategic review, we are confident that continuing to fulfill our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” US Cellular President LeRoy Carlson Jr. said in a statement.

T-Mobile said US Cellular customers will be able to stay with their current plans or switch to a T-Mobile unlimited plan of their choice. They will not incur switching costs if a plan change is made.

That’s a mixed bag for consumers, said Wedbush’s Ives.

“The US consumer has less choice, but there is more competition and that can drive down prices,” said Ives.

The transaction includes a combination of cash and up to about $2 billion in assumed debt. Up to $100 million of the cash component is dependent on meeting certain financial and operational metrics between the signing and closing of the agreement.

US Cellular will maintain approximately 70% of its spectrum portfolio in various spectrum bands.

The deal was unanimously approved by the boards of United States Cellular Corp. and Telephone and Data Systems Inc, which is the majority shareholder of US Cellular. It is expected to close in mid-2025.

Shares of US Cellular jumped more than 2% in Tuesday morning trading.