Following the news that United States Cellular Corporation (UScellular) has agreed to sell its wireless operations and a portion of its spectrum assets in the US to T-Mobile for $4.4 billion;

Charles Garrett, Principal Analyst, Global Telecom Consumer Services at GlobalData, a leading data and analytics company, says:

“UScellular’s announcement of a strategic review in August 2023 signaled to the market that the country’s largest regional mobile network operator (MNO) was putting its assets in play. Considering this represented an opportunity to acquire spectrum, a particularly precious commodity as long as the US Federal Communication Commission’s auction authority remains in limbo, interest from the national MNOs was certainly to be expected.

“Assuming that the transaction receives regulatory approval, T-Mobile will also secure UScellular’s base of 4 million-plus wireless subscribers, alongside spectrum assets that align nicely with T-Mobile’s plans moving forward. While the sub-6 GHz frequencies can enhance coverage and capacity for mobile customers – particularly in the 40% of UScellular’s existing footprint covering rural areas – the mmWave spectrum in the 24 GHz range could prove strategic down the road in adding capacity for high-speed home Internet offerings via 5G fixed wireless access (FWA).

“Of course, the regulatory and political climate will be extremely relevant for the timing and conditions surrounding this deal, which aims to close by mid-2025. Just how regulatory authorities could perceive the agreement will vary significantly depending on which administration is in place by 2025, potentially impacting the timeframe for completing the operation. T-Mobile’s Mint acquisition completed in May 2024 – months after the original projection of a 2023 closing – and that transaction lacked the spectrum considerations present in the UScellular deal.”

Jesús Romo, Americas Research Director, Telecoms Market Data & Intelligence at GlobalData, adds:

“An important aspect of this announcement is what UScellular intends to keep in terms of assets. The company will retain 70% of its spectrum portfolio – a trove of assets that is most likely to be negotiated in the spectrum secondary market. UScellular aims to keep strategic mid-band frequencies, including licenses from the 3.45 GHz and C-Band, as well as mmWave capacity that could receive interest from FWA operators, a market now projected to exceed 20 million accesses by 2028, according to GlobalData’s estimates.

“UScellular is also keeping its wireless towers and retaining T-Mobile as the main tenant for 15 years in over 2,600 sites, making UScellular a more prominent ‘towerco’ player in the US, a strategic sector to allow 5G network and densification across the country.”