T-Mobile, one of the largest carriers in the US, is negotiating the acquisition of US Cellular following its recent acquisition of Mint Mobile for $1.3 billion. US Cellular has been exploring potential buyers for some time. According to a report by The Wall Street Journal, T-Mobile and Verizon are currently negotiating to acquire different segments of the carrier.
T-Mobile and Verizon are dividing the acquisition to stop regulators from blocking the deal
If the deal goes through, T-Mobile will acquire a significant portion of US Cellular’s assets valued at approximately $2 billion. Verizon will acquire the remaining assets, but this can only happen after the deal receives approval from US authorities. This approval process is designed to ensure that the acquisition does not harm competition in the market. T-Mobile and Verizon are some of the largest cellphone carriers by subscribers, with 117.9 million and 144.8 million subscribers, respectively.
The purchase appears to be a strategic move to acquire more spectrum.
The US cellphone carrier industry includes major players such as AT&T, Verizon, and T-Mobile. Meanwhile, smaller carriers like US Cellular typically serve regions not covered by these major players. As the value of wireless licenses in the US increases, this strategic move by T-Mobile and Verizon will provide them access to over 51 million spectrum licenses from US Cellular.
By acquiring US Cellular, T-Mobile and Verizon can expand their subscriber base in these regions. According to Phone Arena, US Cellular’s 4000 cellular towers are not part of the acquisition discussions and will remain intact. Should the acquisition proceed, the number of competitors in the US cellphone carrier industry will decrease.
This reduction in competition may attract more scrutiny from authorities, as customers will have fewer options. The Verge highlights that T-Mobile’s previous acquisition of Sprint was approved only after the carrier pledged to transform Dish into a new major US cellular carrier.