US Cellular has finalized an agreement to divest some of its spectrum licenses to the telecommunications powerhouse AT&T for approximately $1.02 billion in cash. This strategic move follows US Cellular's initiative to monetize spectrum licenses excluded from its earlier May deal with T-Mobile US. Under that agreement, T-Mobile committed to purchasing US Cellular's wireless operations along with select spectrum assets valued at $4.4 billion. Just last month, US Cellular disclosed plans to transfer certain spectrum licenses it retains to Verizon Communications and two additional mobile network operators. Chief Executive Laurent Therivel expressed satisfaction with the substantial value anticipated from the recently announced transactions: 'We are pleased with the significant value that will be realized in the various transactions recently announced.' The deal with AT&T will encompass 1.25 billion MHz-Pops of 3.45 GHz spectrum and 331 million MHz-Pops of 700 MHz B/C block licenses.
The $1.02 billion transaction price may be subject to adjustments. An AT&T representative explained the impact of this acquisition: 'The anticipated future deployment of this wireless spectrum will increase AT&T's 5G wireless network capacity in more than 100 markets across virtually every region of the country.' US Cellular has acknowledged that some of the licenses under this deal are owned by a third party.
Consequently, the transfer of these licenses to AT&T hinges on US Cellular securing equity in that third party, which it does not currently hold. The AT&T transaction has received approval from Telephone and Data Systems, US Cellular's 83% shareholder. Nevertheless, most of this deal is contingent on US Cellular successfully concluding its transaction with T-Mobile and obtaining the necessary regulatory approvals. Post-transaction, US Cellular expects to retain 1.86 billion MHz-Pops of low and mid-band spectrum, alongside an impressive 17.2 billion MHz-Pops of mmWave spectrum, with the majority of retained value situated in the C-band spectrum.
Therivel noted, 'We will continue to look for ways to opportunistically monetize the C-band, as well as the other remaining spectrum.'.