T-Mobile to Acquire UScellular Wireless Operations and Deliver Exceptional Value, a Superior 5G Experience and Unparalleled Benefits to Millions of Customers
T-Mobile (NASDAQ: TMUS) announced its acquisition of UScellular’s wireless operations, including customers, stores, and certain spectrum assets. This move aims to enhance T-Mobile’s 5G network, especially in rural areas, offering improved connectivity and value-packed plans. The transaction, valued at approximately $4.4 billion, comprises cash and up to $2 billion of debt assumption. T-Mobile expects around $1 billion in annual cost synergies post-integration, with completion anticipated by mid-2025. The acquisition promises to spur competition, improve customer experiences, and expand T-Mobile's market reach.
- Acquisition valued at approximately $4.4 billion enhances T-Mobile's market position.
- Expansion of 5G network to underserved rural areas, improving connectivity.
- Potential $1 billion in annual cost synergies post-integration.
- Opportunity for UScellular customers to save hundreds of millions annually.
- Increased competition and more consumer choices in the wireless market.
- T-Mobile's proven track record with successful mergers like MetroPCS and Sprint.
- Integration plan does not impact T-Mobile’s 2024 financial guidance or shareholder return program.
- Integration costs estimated between $2.2 billion and $2.6 billion.
- Debt assumption of up to $2 billion adds financial liabilities.
- The deal's completion depends on regulatory approvals, introducing uncertainty.
- Potential challenges in merging operations and retaining customer satisfaction.
Insights
T-Mobile's acquisition of UScellular’s wireless operations for approximately
Investors should note that T-Mobile has a track record of successful integrations, as seen in the MetroPCS and Sprint mergers. The company plans to reinvest a portion of the synergies to enhance consumer choice and competition in the wireless industry, which could positively impact long-term growth. However, the deal's impact on T-Mobile's 2024 guidance or shareholder return program is expected to be neutral, suggesting no immediate financial strain but no short-term financial boost either.
Key considerations for investors include the acquisition's potential to expand T-Mobile’s market reach, especially in underserved rural areas. This expansion could drive long-term revenue growth. Additionally, the financial structure of the deal, with its mix of cash and debt, warrants attention as it could affect T-Mobile's balance sheet and leverage ratios.
Overall, this transaction presents a strategic growth opportunity with manageable financial risks, contingent on successful integration and realization of projected synergies.
The acquisition of UScellular’s wireless operations by T-Mobile is poised to significantly enhance 5G network coverage and performance, particularly in underserved rural areas. By integrating UScellular’s spectrum assets with T-Mobile’s existing network, the combined entity will offer superior connectivity, moving from a roaming experience to full nationwide access on the largest and fastest 5G network in the U.S.
This transaction highlights T-Mobile’s commitment to delivering a superior 5G experience. 5G technology provides faster data speeds, lower latency and greater capacity compared to previous generations. For rural customers, who often face limited internet options, this can be transformative, enabling better access to online services, remote work and digital education.
Moreover, T-Mobile’s plan to offer UScellular customers access to its value-packed plans and benefits, including streaming services and international roaming, could drive customer retention and acquisition. The enhanced competition in regions dominated by AT&T and Verizon might lead to more competitive pricing and better service offerings across the industry.
However, the integration process can be complex and time-consuming. Potential technical challenges in merging networks and aligning service offerings must be managed carefully to avoid disruptions. Still, T-Mobile's previous successful integrations suggest that the company is well-prepared to handle these challenges.
This strategic move will likely strengthen T-Mobile’s position as a leader in the 5G space, benefiting customers and potentially driving long-term technological advancements and innovation.
Un-carrier Will Give UScellular and T-Mobile Customers More Value and Better Experiences, and Spur Growth and Competition that Offers More Choice for Wireless Consumers
Upon closing, T-Mobile’s leading 5G network will expand to provide millions of UScellular customers, particularly those in underserved rural areas, a superior connectivity experience, moving from a roaming experience outside of the UScellular coverage area to full nationwide access on the country’s largest and fastest 5G network. Additionally, UScellular customers will have the ability to fully participate in the Un-carrier’s industry-leading value-packed plans filled with benefits and perks, and best-in-class customer support with the opportunity to save UScellular customers hundreds of millions of dollars. 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. And wireless consumers across the country will benefit from the enhanced choice and competition that this proposed transaction will create.
“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.”
Best-in-Class Network Experience
The combination of both companies’ spectrum and assets will provide UScellular customers a superior connected experience on T-Mobile’s industry-leading nationwide 5G network that offers best-in-class performance, coverage, and speed. Customers of both companies, particularly those in underserved rural areas, will receive access to faster and more reliable 5G service they would not otherwise have.
Value-Packed Plans
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 beloved Un-carrier benefits such as streaming and free international data roaming. If UScellular customers choose to switch to T-Mobile, they could save hundreds of millions of dollars combined annually. Some will also have access to plans with increased savings previously not available to them, including T-Mobile’s 5G Unlimited 55+ plans. All customers will be able to take advantage of T-Mobile’s award-winning customer service team, and have better, more accessible in-person and digital retail support.
More Choice and Increased Competition
This transaction will create a much-needed choice for wireless in areas with expensive and limited plans from AT&T and Verizon, and for those that have been limited to one or no options for home broadband connectivity. By tapping into the additional capacity and coverage created through the combined spectrum and wireless assets, T-Mobile will spur competition and expand its fast-growing home broadband offering and fixed wireless products to communities without competitive broadband options, further bridging the digital divide for hundreds of thousands of customers in UScellular’s footprint.
Proven Un-carrier Playbook
T-Mobile has a proven industry-leading track record of bringing companies together in the name of enhanced connectivity, choice, and value for consumers. The integrations of MetroPCS in 2013 and Sprint in 2020 have been noted as two of the most successful merger combinations in wireless history that resulted in competition-enhancing shifts benefiting millions of consumers. Leveraging its tried-and-true playbook for successful integrations, T-Mobile will continue to deliver exceptional value and experiences to more people across the country, while forcing others to follow suit, for the good of customers.
Transaction Details and Financial Profile
T-Mobile will pay approximately
The transaction, which is subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, is expected to close in mid-2025.
Advisors
Cleary Gottlieb Steen & Hamilton LLP and DLA Piper LLP are acting as legal counsel to T-Mobile.
About T-Mobile
T-Mobile US, Inc. (NASDAQ: TMUS) is America’s supercharged Un-carrier, delivering an advanced 4G LTE and transformative nationwide 5G network that will offer reliable connectivity for all. T-Mobile’s customers benefit from its unmatched combination of value and quality, unwavering obsession with offering them the best possible service experience and undisputable drive for disruption that creates competition and innovation in wireless and beyond. Based in
Forward-Looking Statements
This communication contains certain forward-looking statements concerning T-Mobile and the proposed transaction to acquire certain wireless assets and operations of UScellular. All statements other than statements of fact, including information concerning future results, are forward-looking statements. These forward-looking statements are generally identified by the words “plan,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Such forward-looking statements include, but are not limited to, statements about the benefits of the proposed transaction, including T-Mobile’s objectives, expectations and intentions, anticipated future financial and operating results, and the accounting treatment, the impact on the company’s guidance, potential synergies and the expected timing of completion of the proposed transaction. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the failure to satisfy any of the conditions to the proposed transaction on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the parties to terminate the definitive agreements; adverse effects on the market price of T-Mobile’s common stock and on T-Mobile’s operating results because of a failure to complete the proposed transaction in the anticipated timeframe or at all; negative effects of the pendency or consummation of the proposed transaction on the market price of T-Mobile’s common stock and on T-Mobile’s operating results; the risk of litigation or regulatory actions; and other risks and uncertainties detailed in T-Mobile’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including in the sections thereof captioned “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” as well as in its subsequent reports on Form 8-K and Form 10-Q, all of which are filed with the SEC and available at www.sec.gov and www.t-mobile.com. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in or implied by such forward-looking statements. Given these risks and uncertainties, persons reading this communication are cautioned not to place undue reliance on such forward-looking statements. T-Mobile assumes no obligation to update or revise the information contained in this communication (whether as a result of new information, future events or otherwise), except as required by applicable law. References to our and the SEC’s website are inactive textual references only. Information contained on our and the SEC’s website is not incorporated by reference in this communication and should not be considered to be a part of this communication.
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Source: T-Mobile US, Inc.
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