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T-Mobile is reportedly close to buying a portion of the regional carrier US Cellular, while Verizon has also held talks about buying some of US Cellular’s assets. “T-Mobile is closing in on a deal to buy a chunk of the regional carrier for more than $2 billion, taking over some operations and wireless spectrum licenses, according to people familiar with the matter,” The Wall Street Journal reported yesterday.
When contacted by Ars today, T-Mobile said it doesn’t “comment on rumors and speculation.” We contacted US Cellular and will update this article if we get a response.
T-Mobile is one of just three major nationwide carriers. There were four until T-Mobile bought Sprint in 2020. T-Mobile also completed an acquisition of prepaid carrier Mint Mobile less than two weeks ago.
The WSJ reports that a T-Mobile/US Cellular “deal could be reached as soon as later this month.” Verizon reaching its own deal with US Cellular could result in “separate transactions that would give both buyers access to valuable airwaves,” the report said.
While the WSJ report said that T-Mobile and Verizon are both “in discussions to carve up US Cellular,” a deal between US Cellular and Verizon appears to be less likely than the proposed T-Mobile transaction. Verizon declined to comment, but a source close to the issue told Ars that Verizon is not currently in talks with US Cellular.
The WSJ report paraphrases sources as saying that US Cellular’s “discussions with Verizon on a separate transaction are expected to take longer or might not result in an agreement.” The news report states that the “split-sale structure is designed to convince antitrust authorities who will review the deal that the tie-up won’t hurt competition.”
US Cellular may survive as smaller company
US Cellular would apparently stick around in some form even if it completes deals with both major carriers, the WSJ report said:
US Cellular offers wireless service to more than four million mostly rural customers across 21 states from Oregon to North Carolina. It also owns more than 4,000 cellular towers that weren’t part of the latest sale talks. The company has a market value of about $3 billion.
Members of the Chicago-based Carlson family control Telephone & Data Systems (TDS), which in turn owns 80 percent of U.S. Cellular. TDS last year put the wireless company’s operations on the block as it struggled with competition from national rivals and cable-broadband providers.
The rising value of wireless licenses is a driving force behind the deal. US Cellular’s spectrum portfolio touches 30 states and covers about 51 million people, according to regulatory filings.
Spectrum has become more valuable partly because Congress let the Federal Communications Commission’s authority to auction spectrum expire in March 2023. FCC Chairwoman Jessica Rosenworcel has urged Congress to restore the spectrum authority the agency held for over 30 years, calling spectrum auctions “an indispensable tool for harnessing the promise of new wireless technologies.”
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