T-Mobile (NASDAQ: TMUS) and UScellular (NYSE: USM) today announced that T-Mobile has agreed to acquire substantially all of UScellular’s wireless operations.
In connection with the agreement, T-Mobile will enter into a new long-term MLA on a minimum of 2,015 incremental towers owned by UScellular and extend the lease term for the approximately 600 towers where T-Mobile is already a tenant. This is designed to ensure continued, uninterrupted service for UScellular’s customers following the transaction and create a long-term contracted revenue stream from a strong anchor tenant for at least 15 years after the close of the transaction, according to UScellular.
Upon closing, T-Mobile’s 5G network will expand to provide UScellular’s nearly 4.5 million customers with connectivity, particularly those in underserved rural areas. Additionally, T-Mobile customers will also get access to UScellular’s network in areas that previously had limited coverage and the benefit of enhanced performance throughout UScellular’s footprint from the addition of the acquired UScellular spectrum to T-Mobile’s network.
UScellular and T-Mobile networks are compatible. Both companies are deploying 5G over wide areas using low-band 600 MHz spectrum. UScellular is using a combination of C-band and 3.45 GHz mid-band spectrum for high-speed data connections while T-Mobile relies on 2.5 GHz for its 5G Ultra Capacity offering. T-Mobile acquired C-band and 2.5 GHz licenses in rural markets that overlap UScellular’s 21-state operating area.
“With this deal T-Mobile can extend the superior Un-carrier value and experiences that we’re famous for to millions of UScellular customers and deliver them lower-priced, value-packed plans and better connectivity on our best-in-class nationwide 5G network,” said Mike Sievert, CEO of T-Mobile. “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit. The Un-carrier is all about shaking up wireless for the good of consumers and this deal is another way for us to continue doing even more of that.”
“T-Mobile’s purchase and integration of UScellular’s wireless operations will provide best-in-class connectivity to rural Americans through enhanced nationwide coverage and service offerings at more compelling price points,” said Laurent Therivel, CEO of UScellular. “The transaction provides our customers access to better coverage and speeds, as well as unlimited texting in more than 215 countries, content offers, device upgrades and other T-Mobile benefits.”
UScellular customers will have the option to stay on their current plans or move to an unlimited T-Mobile plan of their choosing with no switching costs, which include features such as streaming and free international data roaming.
“For over 40 years, UScellular has delivered on its mission of connecting people to what matters most, and this transaction will ensure customers have access to the level of service they deserve,” said LeRoy T. Carlson, Jr., Chair of the Board of Directors of UScellular. “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. T-Mobile has the resources to provide UScellular’s customers with an unparalleled network experience, lower prices and higher-quality services. We are pleased that T-Mobile also shares our commitment to bringing best-in-class connectivity to rural Americans, who today comprise nearly 40 percent of the population that UScellular serves.”
“The decisions we announced today are in the best interests of our customers and our shareholders. T-Mobile is the right partner for our wireless operations and will ensure that customers have access to best-in-class wireless speeds and performance, including 5G and a nationwide network, at compelling prices,” said Laurent Therivel, Chief Executive Officer of UScellular. “We are committed to serving the needs of our customers and supporting our associates as we work to complete the transaction.”
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