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T-Mobile has been on a spree of acquisitions lately. Following the completion of its buyout of Mint Mobile and related properties, the company seems to be on a relentless pursuit of further expansions.

The company started with Sprint, and it’s not stopping. A lot of the acquisitions the company has done have been focused on improving its 5G service, reaching more customers, or both. This latest acquisition seems to be a bit of both, as T-Mobile has just announced plans to buy out US Cellular, or at least the good bits.

T-Mobile has announced that it will, pending approval, acquire most of US Cellular’s wireless operations, including customers, stores, and some spectrum assets, for $4.4 billion.

It’s a costly deal, but one that will expand T-Mobile’s 5G network, particularly benefiting underserved rural areas. US Cellular customers will have access to T-Mobile’s nationwide network and plan options, potentially saving them money. T-Mobile customers will gain coverage in areas previously served by US Cellular. Everyone wins, on paper.

The fine print here is that T-Mobile isn’t buying out all of US Cellular. As a matter of fact, it’s buying off all of the operative side of the business (like clients and infrastructure) while only buying some of the company’s towers. The rest of the towers (about 70% of them!) will remain independently owned, with T-Mobile leasing them and using them. This is perhaps an attempt to make a deal more digestible to antitrust agencies and scrutiny because we’ll certainly get some of that.

The merger aims to improve network experience for customers of both companies, especially in rural areas, by combining spectrum and assets. It also intends to create more choice and competition in regions dominated by AT&T and Verizon, potentially leading to expanded home broadband offerings.

The move is likely going to be pretty unpopular among existing T-Mobile customers, especially the ones that still have the bad taste of a $5 per line increase in their mouth.

T-Mobile will pay a combination of cash and assumed debt, and does not expect this deal to impact its 2024 financial guidance. The company anticipates annual cost savings of $1 billion from the merger. The deal is subject to regulatory approvals and is expected to close in mid-2025.

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