- T-Mobile finalized its acquisition of regional carrier UScellular
- The transition to T-Mobile’s network should be seamless for the majority of UScellular customers
- While UScellular exits the wireless biz, its Array successor is embarking on a new strategy focused solely on towers
As expected, T-Mobile on Friday closed on its $4.3 billion acquisition of UScellular’s wireless operations, including more than 4 million UScellular customers and about 30% of its spectrum.
T-Mobile claims it’s a big win for U.S. mobile and broadband customers across the country, as UScellular customers will see increased speeds and get new perks and savings through T-Mobile’s plans. According to T-Mobile, the transition will be a smooth one, with nearly all of UScellular customer devices compatible with T-Mobile’s network from the get-go.
“We’re improving experiences for millions of UScellular and T-Mobile customers and adding more amazing employees to the T-Mobile family to help us do it,” T-Mobile CEO Mike Sievert said in a statement.
UScellular filed WARN notices in March signaling that it was laying off its entire workforce of 4,100 employees in the 21 states where it operated. At the time, UScellular said it had made arrangements with T-Mobile to offer employment to a majority of those employees “at a salary or wage rate and with benefits, that when taken as a whole, are no less favorable to these employees’ current salary or wage rate and benefits.”
After this story initially published, Fierce received responses from T-Mobile, which confirmed it has extended offers to “a large number of UScellular employees” but did not specify a number.
T-Mobile trashed DEI to get it done
The FCC approved T-Mobile’s acquisition of UScellular’s wireless assets just a few days after T-Mobile informed agency Chairman Brendan Carr that it was eliminating anything and everything related to its diversity, equity and inclusion (DEI) programs, a stipulation Carr made clear was necessary for companies to get their transactions approved by the FCC.
As for any other requirements, the FCC staff pretty much said “no” to calls by consumer advocacy groups to attach employment, handset unlocking, roaming, Lifeline or other conditions to the merger.
The lack of roaming conditions was particularly egregious to the Rural Wireless Association (RWA), which represents rural carriers that serve fewer than 2 million subscribers. Traditionally, they received reciprocal roaming payments from UScellular when the regional carrier’s customers roamed onto their rural networks and they’re skeptical they’ll see the same kind of reciprocal arrangements from T-Mobile going forward.
According to a T-Mobile press release, UScellular customers will “move beyond limited roaming” to a “broader, more powerful experience – starting with reciprocal roaming and evolving into an integrated network experience in the coming months.”
It’s unclear if “an integrated network experience” spells an end to reciprocal roaming for rural carriers.
Here’s what T-Mobile told Fierce today when asked if it will strike reciprocal roaming agreements with the small rural carriers that had reciprocal roaming agreements with UScellular:
“Smaller and rural carriers play a vital role in keeping communities connected, and T-Mobile remains committed to maintaining and expanding roaming relationships where it makes sense. We currently have reciprocal roaming agreements in place with several rural providers, even in areas where we have overlapping service, to ensure seamless connectivity for our customers wherever they go,” T-Mobile said in a statement.
During T-Mobile’s Q2 earnings call last month, CEO Mike Sievert said the combination with UScellular will give it a 50% or more increase in capacity in the combined footprint and its sites in those markets will expand by one-third, from 9,000 to 12,000. That will certainly give T-Mobile better coverage in the smaller markets and rural areas that UScellular served.
UScellular turns to towers
As for UScellular, it’s ending a decades-old run in the mobile business. The company’s parent, Telephone and Data Systems (TDS), agreed to sell UScellular to T-Mobile in May 2024 in a deal then valued at $4.4 billion. But due to UScellular not meeting certain performance benchmarks, the price ended up being $4.3 billion.
To be clear, the UScellular business isn’t entirely going away. What’s left of the company will now focus solely on the tower business and will be known as Array Digital Infrastructure. Array will manage a portfolio of about 4,400 towers and according to the company, its tower assets represent the fifth largest tower business in the U.S.
Helping to kick things off, T-Mobile entered into a 15-year Master License Agreement as a long-term tenant on at least 2,015 towers owned by Array and extended the lease terms for another 600 towers where T-Mobile is already a tenant.
Former UScellular CFO Doug Chambers is serving as interim president and CEO of Array while the company searches for a permanent replacement.
Still to be approved are UScellular’s spectrum sales to Verizon and AT&T, which each expect to pay about $1 billion for airwaves.
Editor's Note: This story was updated August 4 with responses from T-Mobile.