Customers of US Cellular will have access to T-Mobile's 5G network, which will improve their coverage and speed, the company said on Tuesday.
Approximately 70% of the spectrum that U.S. Cellular owns will remain in a variety of frequency bands.
In a $4.4 billion agreement, T-Mobile is acquiring the cellular business and certain spectrum holdings of U.S. Cellular, further dominating the market.
T-Mobile will acquire U.S. Cellularâ's cellular business and around 30% of its spectrum holdings across several frequency bands as part of the arrangement. T-Mobile will also extend the lease period for the roughly 600 buildings where it now has a tenantship and engage into a new master licensing deal on more than 2,000 towers.
"Bringing combined UScellulars network resources with ours will enable us to fill shortages in connectivity that will create a better experience for the majority of our customers with more coverage along with enhanced capacity," T-Mobile CEO Mike Sievert said in a statement.
Customers of US Cellular will have access to T-Mobile's 5G network, which will improve their coverage and speed, the company said on Tuesday.
The chair of U.S. Cellular, LeRoy Carlson Jr., said in a statement: "We are certain that combining our cellular operations with T-Mobile is the best way to attain the size and investment necessary to continue delivering on our goal. This is brought on by growing rivalry as well as the higher capital intensity needed to stay up to date with emerging technology."
In addition to cash, up to $2 billion in assumed debt is part of the deal. The monetary component, which may total up to $100 million, is dependent upon meeting certain operational and financial benchmarks between the signing and conclusion of the contract.
Approximately 70% of the spectrum that U.S. Cellular owns will remain in a variety of frequency bands.
The boards of Telephone and Data Systems Inc., a majority stakeholder of U.S. Cellular, and United States Cellular Corp. have unanimously approved the acquisition. The anticipated closure date is mid-2025.
Tuesday morning's opening bell saw a 13% increase in U.S. Cellular shares. T-Mobile’s stock is flat.
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