T-Mobile’s $26 billion acquisition of Sprint was all about obtaining Sprint’s haul of 2.5GHz mid-band spectrum for use with its 5G network. Unlike Verizon and AT&T, which built out their 5G networks by focusing on zippy fast mmWave signals, T-Mobile realized that the short distances that mmWave signals travel led very few Verizon and AT&T customers to connect to their respective 5G pipelines.
With T-Mobile taking over Sprint’s mid-band airwaves, the carrier became the 5G leader in the states. Why? Well, as T-Mobile undoubtedly realized, mid-band signals might not be as fast as mmWave, but they travel longer distances allowing more users to access downlink speeds about 10 times faster than nationwide 5G and LTE. That led Verizon and AT&T to spend a fortune on C-band spectrum in the mid-band in an attempt to catch up to T-Mobile.
But now T-Mobile’s CEO Mike Sievert is hinting that another acquisition could be considered by the wireless provider. USCellular has been put up for sale and an acquisition of the firm would give T-Mobile more spectrum and other important assets in rural markets. According to Sievert, T-Mobile’s share of the rural wireless market in the States has risen from 13% in 2021 to the current 16.5% The company is targeting a 20% share by 2025.
Inside a USCellular store
Still, Verizon and AT&T are focusing on building its 5G networks near cities which allows T-Mobile to keep a tight hold on its rural customers. According to Cordcutters, during the Goldman Sachs Communacopia + Technology conference on Wednesday, Sievert was asked whether T-Mobile would speed up its rural strategy if an asset was available. The CEO replied, “Maybe, but I like our Plan A a lot.” He noted that “the hurdles for M&A would be high.” He could mean with either regulatory or financial issues.
USCellular said last month that it would “initiate a process to explore strategic alternatives” which is what a company says when it wants to be bought out. The company has 5 million customers in 21 states and owns 4,300 cell towers that will be put up for sale. The company currently has a market capitalization (stock price multiplied by shares outstanding) of $3.56 billion. The stock (USM) closed Friday at $41.75, up nearly $20 and 96% for the year.
