Will T-Mobile buy UScellular? 'Maybe,' says CEO

T-Mobile CEO Mike Sievert said the company might consider purchasing UScellular.

The question came up this week at an investor event, with a Goldman Sachs investment analyst asking Sievert whether he would consider purchasing a rural asset if it became available. Sievert chuckled and, without naming UScellular specifically, said: "Maybe, but I like our Plan A a lot."

Sievert explained that T-Mobile's current rural expansion strategy is working "beautifully." He said the company started its rural efforts in 2021 with a 13% share of that market, and has so far grown it to about 16.5%. He said the company is on track to grow its share of the rural US marketplace to 20% by 2025.

Figure 1:



Mike Sievert.
(Source: UPI/Alamy Stock Photo)

"Our organic strategy is really attractive," he said, adding that T-Mobile is gaining up to 30% of new customers, second only to Verizon, in the rural markets where it competes.

And that, he said, would make any purchase of a rural network operator a difficult proposition financially. "The hurdle would be high," he said of a possible deal.

On the block

To be clear, there are likely a large number of small wireless network operators currently for sale across the US. Indeed, as Light Reading has previously reported, several of them have recently agreed to a sale or have simply shut down their networks and exited the industry.

However, just one month ago, UScellular announced it would "initiate a process to explore strategic alternatives." Meaning, parent company Telephone and Data Systems (TDS) is putting UScellular's assets up for sale. UScellular is the biggest regional wireless network operator in the US.

The move came just weeks after billionaire investor Mario Gabelli said he would attempt a takeover of TDS' board at its next shareholder meeting "in light of the extraordinarily poor performance and the lack of focus as a result of TDS' ownership of UScellular."

"A change in tactics has to be examined and pursued," Gabelli argued at the time.

UScellular operates a wireless network across roughly 21 states; counts around 5 million mobile customers; owns spectrum licenses ranging from 600MHz to AWS, CBRS, 3.45GHz, C-band and 28GHz; and manages around 4,300 cellular towers across its coverage area. The Chicago-based company also employs around 4,600 full- and part-time workers.

Possible suitors

Financial analysts have generally argued that T-Mobile is the most likely buyer of UScellular.

"The best fit may be with T-Mobile," wrote the financial analysts at New Street Research in a recent note to investors. They argued that T-Mobile would likely want access to USCellular's 600MHz, PCS and AWS spectrum licenses – those that T-Mobile is already using in its own network. They speculated that T-Mobile might sell other UScellular spectrum holdings – like the 700MHz that it's not using in its network – to the likes of AT&T and Verizon.

However, T-Mobile isn't the only company likely kicking the tires on UScellular.

"They have towers, they have spectrum, and they operate in geographies that we haven't fully built out. So it would be something that we'd be interested in looking at," said Tom Cullen, of Dish Network, in response to questions on the topic last month.

However, Dish Network is struggling to shore up its own dwindling finances. Indeed, the company recently told a Delaware court that "due to macroeconomic conditions that are no fault of Dish, it is especially difficult today for Dish to responsibly secure further financing."

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano