T-Mobile will buy U.S. Cellular for $4.4 billion, further consolidating the nationwide cellphone industry.
The two companies announced the deal Tuesday, with both claiming it will benefit their existing customers. Federal regulators still need to approve the purchase.
“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,” T-Mobile CEO Mike Sievert said in a press release.
T-Mobile’s purchase includes a combination of cash and $2 billion in assumed debt from U.S. Cellular, which had announced in August 2023 that it would “explore strategic alternatives.”
With the agreement, T-Mobile will acquire all U.S. Cellular’s customers and stores, and 30% of its wireless spectrum. U.S. Cellular will retain ownership of nearly all of its 4,400 cell towers and 70% of its spectrum assets. As part of the deal, T-Mobile agreed to long-term leases on more than 2,500 of the towers.
“We are confident that continuing to deliver on our mission requires a level of scale and investment that is best achieved by integrating our wireless operations with those of T-Mobile,” said LeRoy T. Carlson, Jr., Chair of the Board of Directors of U.S. Cellular.
U.S. Cellular currently serves about 4 million customers, 40% of whom live in rural areas, according to the company. T-Mobile is the nation’s third-largest cellphone carrier, with nearly 120 million customers. T-Mobile, Verizon and AT&T comprise nearly the entire market.
T-Mobile has routinely scooped up smaller competitors over the past decade-plus. In 2013, it completed a purchase of MetroPCS, and last year announced its purchase of Mint Mobile. That deal was finally approved by the Federal Communications Commission last month.
The company’s biggest purchase was its merger with Sprint, which was finalized in 2020. At the time the deal was announced, Sprint was the country’s fourth-largest carrier.
Though federal regulators have been stricter about massive mergers under the Biden Administration, the earlier approval of T-Mobile’s acquisition of Mint Mobile suggests the U.S. Cellular purchase will also be allowed.
