(Bloomberg) — Verizon Communications Inc. is interested in buying back US Cellular Corp.’s stake. in its Los Angeles businesses if the companies can agree on a reasonable price, the head of Verizon’s consumer division said.
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US Cellular has a stake in Verizon’s Los Angeles market segment, and Verizon is eager to buy it back, Verizon Consumer CEO Sowmyanarayan Sampath said in an interview Monday. He said the company would only close a deal if the price was fair. Sampath declined to say what Verizon would consider a fair price, and it’s unclear whether a deal will be reached.
“I want to buy this back – I’ve been quite open about it,” Sampath said. “But it has to be at a price that makes sense for us.”
A representative for US Cellular declined to comment.
US Cellular’s parent company, Telephone and Data Systems Inc., said in a 2016 filing that it held a 5.5% equity stake in Los Angeles SMSA Limited Partnership and Subsidiary, with Verizon managing the entity. TDS, in an annual report filed April 19, said its investment in the Los Angeles partnership contributed pre-tax income of $65 million for 2023 and 2022.
“They arrived at the right time at that time,” Sampath said.
Sampath said US Cellular has small stakes in “a few other businesses as well, but Los Angeles is the vast majority of the business.” Buying back shares would allow Verizon to consolidate and “cut one less check” per year to a partial owner, he said.
“For almost 20 years we have said we are interested in buying it back,” Sampath said. “We are always open to that. That’s the bit we like. This is the piece we like because we are buying back something we know very well.”
The Wall Street Journal reported last week that Verizon and T-Mobile US Inc. were in talks to buy parts of US Cellular, a carrier with more than 4 million wireless subscribers in 21 states and a market value of US $3.86 billion at Monday’s close.
In recent years, rivals AT&T Inc. and T-Mobile have captured larger shares of the U.S. wireless retail market, while Verizon’s share has fallen to 35.2% in 2023 from 36.5% in 2021, according to data compiled by Bloomberg. In an attempt to restore growth, Verizon’s Sampath raised prices and offered additional perks such as bundled Netflix and Max streaming plans.
Verizon’s customer losses have slowed, but not ended. The carrier said it lost 158,000 wireless retail mobile subscribers in the first quarter.
(Updates with additional citations in seventh and eighth paragraphs.)
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