Today, United States Cellular Corporation (USM) announced that it has entered into an agreement with AT&T (T) to sell a portion of the Company’s retained spectrum licenses for a total consideration of $1.018 billion.
The deal is part of the objective UScellular announced on May 28, 2024, to opportunistically monetize the spectrum that was not included in the proposed sale to T-Mobile. And this follows the transactions previously announced on October 18, 2024, to sell a portion of the retained spectrum licenses to Verizon and two other mobile network operators.
Following this deal, as well as those previously announced, UScellular will have reached definitive agreements to monetize approximately 55%, measured on an MHz-Pops basis, of the spectrum holdings (excluding mmWave) that were excluded from the proposed sale to T-Mobile, for a total consideration of approximately $2.02 billion. Including the proposed T-Mobile transaction, UScellular will have reached agreements to monetize approximately 70% of its total spectrum holdings (excluding mmWave), measured on an MHz-Pops basis.
This agreement with AT&T includes the sale of 1,250 million MHz-Pops of 3.45 GHz and 331 million MHz-Pops of 700 MHz B/C block licenses for $1.018 billion. And the purchase price is payable in cash and subject to certain potential adjustments, as specified in the purchase agreement.
Nearly all of the transactions are contingent upon closing the sale of the UScellular wireless operations and selecting spectrum assets to T-Mobile. They are subject to receiving regulatory approvals and satisfaction with customary closing conditions.
Some licenses being sold to AT&T are owned by a third party. The sale is contingent upon UScellular’s purchase, which is pending regulatory approval, of the equity in the third party that UScellular does not currently own. Those licenses cover approximately 15% of the total MHz-Pops in the announced transaction.
TDS, as the 83% shareholder of UScellular, has delivered its written consent approving the AT&T transaction. No further action by UScellular’s shareholders will be needed or solicited in connection with the transaction.
Citigroup Global Markets is working as the lead financial advisor, and Centerview Partners is working as the financial advisor to TDS. And TD Securities (USA) LLC and Wells Fargo are also working as financial advisors to TDS. Wilkinson Barker Knauer is working as lead transactional and FCC regulatory counsel to both TDS and UScellular. In addition, Clifford Chance is working as a regulatory advisor to both TDS and UScellular, and Sidley Austin is working as a legal advisor to TDS. PJT Partners is working as financial advisor and Cravath, Swaine & Moore is working as legal advisor to the independent directors of UScellular.
KEY QUOTES:
“We are pleased with the significant value that will be realized in the various transactions recently announced. This agreement adds a fourth mobile network operator, in addition to T-Mobile, to the list of those whose subscribers will benefit from the sale of our spectrum licenses. As with the other mobile network operators, we are confident that AT&T can put it to productive use in communities throughout the U.S. Furthermore, the terms of the agreement will ensure that there will be continued, uninterrupted service for UScellular customers in the interim.”
“After our proposed sales, we will be left with 1.86 billion MHz-Pops of low and mid-band spectrum, as well as 17.2 billion MHz-Pops of mmWave spectrum, with the substantial majority of retained value in the C-band spectrum.”
“The C-band licenses have a number of attributes that we believe are favorable to their long-term value. First, our C-band licenses are positioned in an attractive mid-band frequency that can deliver outstanding speed and capacity. Second, there is a substantial 5G ecosystem of equipment vendors and existing infrastructure that uses C-band. Finally, they have a lengthy build-out timeline, with first and second build-out dates of 2029 and 2033, respectively. This provides ample time and optionality for us to either monetize or deploy the spectrum in the future. We will continue to look for ways to opportunistically monetize the C-band, as well as the other remaining spectrum.”
- Laurent C. Therivel, President and CEO
