T-Mobile on a shopping spree
The telecommunications group is buying the mobile communications business of U.S. Cellular for 4.4 billion US dollars to improve 5G coverage in rural areas.
A building at the T-Mobile USA headquarters in Bellevue, Washington
(Image: Daniel AJ Sokolov)
Telecommunications company T-Mobile will acquire nearly all of the wireless business of regional carrier United States Cellular, including its customers, retail stores and 30 percent of its spectrum assets, in a $4.4 billion deal. U.S. Cellular will retain ownership of "its other spectrum as well as its towers," while T-Mobile will enter into a long-term agreement to lease more than 2,000 towers. T-Mobile made the announcement on Tuesday.
The acquisition will improve nationwide coverage for U.S. Cellular customers, according to a company blog post. At the same time, the expansion of T-Mobile's 5G network will improve 5G connectivity in "underserved rural areas". According to the tech portal The Verge, T-Mobile sometimes has difficulties there compared to its competitors AT&T and Verizon. The takeover deal will also reduce the number of providers competing in markets where U.S. Cellular offers services, The Verge points out. This will certainly be "an issue" when it comes to "regulatory approval" of the takeover. The Wall Street Journal reported earlier this month on rumors that U.S. Cellular's business would be split between T-Mobile and Verizon to prevent the deal from being blocked by regulators. So far, however, this is speculation. According to T-Mobile, the transaction should be completed by mid-2025.
Sprint takeover as a cautionary tale
The CEO of T-Mobile, Mike Sievert, is optimistic about the possible effects. "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," he is quoted as saying in the company's statement. "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 T-Mobile takeover of Sprint shows that promises do not always materialize to the benefit of customers. In April 2020, the mobile network operators T-Mobile USA and Sprint merged. The resulting reduction in competition is said to have prompted competitors Verizon and AT&T to set their prices higher than they would have been without the merger. Numerous consumers made this accusation and filed a lawsuit to reverse the merger.
The announcement of the U.S. Cellular acquisition comes just weeks after T-Mobile completed its purchase of wireless provider Mint Mobile for $1.35 billion.
(akn)
