UScellular customers can expect to see improved services following T-Mobile’s announcement that it has acreed to buy the bulk of the company — but it will be mid-2025 before that happens, said Jason Leigh, research manager for IDC’s mobility team.
As part of the $4.4 billion deal, T-Mobile has “agreed to acquire substantially all of UScellular’s wireless operations. This includes (its) wireless customers and stores, as well as certain specified spectrum assets;” according to a company statement.
Service improvements will kick in, said IDC’s Leigh, once the transaction closes, which is expected in about 12 months.
Leigh described the sale as no surprise. Chicago-based UScellular will retain ownership of its other spectrum as well as its towers, with T-Mobile entering into a long-term arrangement to lease space on at least 2,100 additional towers being retained. UScellular last year said it was looking for strategy options, “which is simply code for ‘we’re looking to sell something.’ It was somewhat inevitable,” he said.
UScellular has a strong brand presence in the U.S. Midwest, Leigh said, but they have “been losing subscribers at a decent clip. And it is hard to keep up with all of the investment that needs to go into infrastructure, particularly with the deployment and adoption of 5G.”
Building 5G networks is cash intensive, Leigh said, and while UScellular is building its own 5G , because of the nature of where it operates, it is left with holes in its 5G coverage. “You’re constantly stuck in this limbo of flipping back and forth between LTE and 5G, which is not something most phones do very well,” he said. “If you are driving, it suddenly moves from a tower that is on 5G to a tower that is on 4G. Your connection gets a little wonky. It is just not seamless.”
UScellular customers, he said will have the opportunity to “tap into the breadth of what T-Mobile has done on a spectrum level, creating this high-performing 5G network. For years, Verizon was the most reliable network. And T-Mobile aggressively has attacked 5G and I think they are trying to wrestle that mantle away from Verizon in terms of most reliable.”
If the deal is approved, then consumers with UScellular contracts will have the option to stay on their current plans or move to an unlimited T-Mobile plan of their choosing with no switching costs, with benefits that include streaming and free international data roaming, T-Mobile said.
The company didn’t disclose its plans for enterprise customers.
Laurent Therivel, CEO of UScellular, said that the “transaction provides our customers access to better coverage and speeds, as well as unlimited texting in more than 215 countries, content offers, device upgrades and other T-Mobile benefits.”
T-Mobile said it will pay for the acquisition with a combination of cash and the assumption of up to $2 billion of UScellular’s debt.
Source:: Network World