UScellular Expects Regulators to Act Soon on T-Mobile Deal
UScellular executives on Friday projected a mid-2025 closing on the proposed sale of wireless assets to T-Mobile following regulatory approvals. During a call with analysts to release Q1 results, UScellular said it lost 39,000 postpaid subscribers in the period ending March 31.
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“We remain enthusiastic on the long-term potential for the tower business as the capacity needs of the wireless industry in the coming years will likely drive continued demand for towers,” said CEO Laurent Therivel. The tower business “will be strengthened even further upon the anticipated closing of our transaction with T-Mobile and the initiation of the tower [master lease agreement] that's part of that transaction.”
The carrier is cutting costs to sustain current cash-flow levels, Therivel said: “Our size and lack of scale makes it difficult to sustain this balance of high promotional expense and reduced investments.”
UScellular CFO Doug Chambers said $100 million of the $4.4 billion purchase price is contingent on his company hitting performance targets that it probably won’t make, so the transaction is likely to be closer to $4.3 billion. UScellular reported revenues of $891million in Q1, down 4% over the year-earlier quarter, and operating income of $41 million, down 19%. Service revenues of $741 million were down 2%.
T-Mobile, meanwhile, submitted additional data to the FCC in response to a December letter asking about the company’s proposed agreement to buy “substantially all” of UScellular’s wireless operations (see 2405280047). The filing last week in docket 24-286 was heavily redacted.
“This filing provides a specification-by-specification response to the Information Request,” T-Mobile said. The carrier hasn’t “conducted a site-by-site analysis of costs involved in integrating UScellular spectrum into existing T-Mobile sites” and “cannot say with certainty that there will be zero costs associated with that effort,” the filing said: “Integration costs are likely to be negligible given the scope of the Transaction, especially because the spectrum can simply be remotely added to the sites; T-Mobile does not expect to buy new power amplifiers or any other equipment, nor will it incur added software licensing costs.”