United States Cellular Corp USM has agreed with AT&T Inc T to sell a portion of its retained spectrum licenses for $1.018 billion.
The transaction aligns with UScellular's strategy, announced in May 2024, to capitalize on its remaining spectrum assets, which are not included in the proposed sale to T-Mobile US Inc TMUS.
This sale follows agreements made in October 2024 to sell other retained licenses to Verizon Communications Inc VZ and two additional mobile network operators.
Laurent C. Therivel, President and CEO of UScellular, emphasized the value generated through recent deals, noting that AT&T's inclusion as a buyer expands the roster of networks set to benefit from UScellular's assets.
Therivel expressed confidence that AT&T will utilize the acquired licenses to support communities across the U.S.
With this transaction and previous agreements, UScellular has established deals to monetize around 55% of its spectrum holdings (excluding mmWave) on an MHz-Pops basis.
These deals collectively amount to approximately $2.02 billion. Once the proposed T-Mobile transaction is finalized, UScellular will have agreements to monetize approximately 70% of its overall spectrum assets.
Therivel added that UScellular would retain 1.86 billion MHz-Pops of low- and mid-band spectrum and 17.2 billion MHz-Pops of mmWave spectrum. He highlighted the strategic value of UScellular's C-band licenses, which offer competitive mid-band frequencies, strong support in the 5G ecosystem, and extended build-out timelines through 2029 and 2033.
This flexibility allows UScellular to leverage or sell these assets in the future, with plans to explore further monetization options for the C-band and other remaining spectrum.
The agreement involves selling 1,250 million MHz-Pops of 3.45 GHz licenses and 331 million MHz-Pops of 700 MHz B/C block licenses to AT&T for $1.018 billion, subject to potential adjustments outlined in the purchase agreement.
The transaction's completion hinges on closing the T-Mobile deal and obtaining regulatory approvals and customary closing conditions.
Some licenses to be transferred to AT&T are partially owned by a third party. Their sale will depend on UScellular's purchase of remaining equity in the third party, which is pending regulatory approval. These licenses account for around 15% of the MHz-Pops covered in this sale.
TDS, which holds an 83% stake in UScellular, has formally approved the transaction with AT&T.
AT&T generated $10.24 billion in operating cash flow and $5.095 billion in free cash flow for the September 30, 2024 quarter. T is down 0.94%.
Price Action: USM stock is up 0.20% at $65.28 at the last check on Thursday.
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