T-Mobile US reportedly considering the purchase of UScellular assets

T-Mobile US is rumored to be considering the purchase of UScellular spectrum licenses for more than $2 billion

T-Mobile US is in discussions to purchase a piece of UScellular, a move that would give the telco access to additional spectrum, according to reports from The Wall Street Journal (WSJ). Further rumors indicate that T-Mobile US is considering parting with more than $2 billion for these assets and that the deal might close as soon as this month.

In August 2023, the boards of both UScellular and its majority shareholder Telephone and Data Systems (TDS) revealed that they were mulling the partial sale of its assets. When this was announced, analysts at New Street Research speculated that T-Mobile might go after UScellular’s 600MHz, PCS and AWS spectrum licenses and sell the spectrum that it is not using its network such as the 700MHz to other providers.

UScellular also operates 4,500 cell towers in the U.S.; however, it is unlikely that T-Mobile is interested in purchasing these infrastructure assets.

Last June, UScellular launched its 5G mid-band network in 10 states across the country. “We view mid-band as the sweet spot of 5G because it provides broad coverage, low latency and fast speeds – enabling more people to connect to what matters most at home or on-the-go,” Mike Irizarry, executive vice president and CTO at UScellular, said at the time. “As we approach serving 100,000 high-speed Internet customers later this summer, mid-band will play an important role in furthering the reach and enhancement of that product. We’ve made it a priority to expand the technology to more communities in the coming years.” The carrier’s 5G mid-band network is using spectrum in the 3.45 GHz band that the company secured in 2022.

UScellular reported its most recent quarterly results this week. Its Fixed Wireless Access business continues to gain momentum, with the company reporting that it added 124,000 FWA customers during the first quarter, up 42% from the same time last year. Overall, the company reported mixed results compared the same period last year: Service revenues were down 2%, postpaid ARPU was up 3% to $51.96, and while its overall operating revenues were also down from $986 million to $950 million year-over-year, its cut-cutting measures meant that net income was up at $18 million for the quarter, compared to $13 million in the first quarter of 2023. More details from its Q1 are in this story.