T-Mobile goes for UScellular’s spectrum, customers with $4.4B deal

T-Mobile said it plans to purchase around 30% of UScellular spectrum holdings, all of its 4.5 million customers and its retail stores in a deal worth $4.4 billion. T-Mobile has also said it will make job offers to “a significant number” of UScellular’s employees as part of the transaction.

Broadly, the deal builds on T-Mobile’s efforts to grow its wireless business through the acquisitions of Sprint in 2020 (worth $26 billion) and Mint Mobile in 2024 (worth $1.3 billion).

However, T-Mobile may face challenges in getting regulators to approve its latest acquisition – particularly given new research that found T-Mobile’s purchase of Sprint “led to higher prices and consumer harm.” But some analysts, such as Blair Levin, believe T-Mobile’s move on UScellular will ultimately pass regulatory muster.

“We believe the transaction(s) is likely to gain government approval but there would likely be a second request [for information]. Further, given the current antitrust leadership, the odds don’t reach the high level of certainty that they would have in a prior time,” wrote Levin, a policy adviser to New Street Research and a former high-level FCC official, in a note to investors Tuesday, following the announcement of T-Mobile’s deal for UScellular.

The Biden administration has moved against a number of prominent companies in antitrust actions in recent years.

T-Mobile’s new agreement with UScellular also highlights the challenges that smaller, regional wireless network operators like UScellular have faced in recent years. Indeed, UScellular is just the latest in a long line of such operators to sell their operations to larger wireless players.

“In the face of rising competition and increasing capital intensity required to keep pace with the latest technologies, and following our careful and deliberate strategic review, we are confident that continuing to deliver on our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” said LeRoy T. Carlson Jr., chair of the board of directors of UScellular, in a release.

LeRoy T. Carlson Jr. is the son of LeRoy T. Carlson, who founded TDS – the parent company of UScellular – in 1969. Under his leadership, TDS grew from a collection of small, rural telephone operations in Wisconsin to a national telecommunications provider with billions of dollars in revenue. LeRoy T. Carlson died in 2016 at the age of 100. Walter C. D. Carlson, LeRoy T. Carlson Jr. and other members of the Carlson family have since guided TDS. The company put UScellular up for sale last year.

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