Despite fierce regulatory scrutiny of consolidation within the U.S. wireless industry, AT&T announced its $1 billion acquisition of spectrum assets from United States Cellular Corporation. The all-cash deal arrives on the heels of deals with T-Mobile and Verizon to divide up U.S. Cellular.
“The transaction is part of the objective U.S. Cellular announced on May 28, 2024, to opportunistically monetize the spectrum that was not included in the proposed sale to T-Mobile; and 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,” according to the deal’s press release. Spectrum assets are the radio frequencies licensed by governments to wireless carriers for use in transmitting data.
The “Big 3” wireless carriers dominate the U.S. market with a 93.8% market share – and regulators have launched antitrust initiatives in response. AT&T itself was broken up in 1982 in a landmark agreement with the Department of Justice. AT&T had controlled 80-85% of phone lines in the U.S. in 1982 but agreed to split the corporation into nine separate companies. During the following decades, many of those companies re-merged or were acquired by other telecom giants to create today’s landscape.
Source: Wyoming LLC Attorney
In fact, AT&T attempted to acquire T-Mobile in 2011 for $39 billion but was derailed by Federal Communications Commission (FCC) opposition. T-Mobile has faced political opposition to its related acquisition of the majority of US Cellular’s assets. On the heels of its deal to acquire Mint Mobile and Ultra Mobile, T-Mobile announced its intentions to acquire most of U.S. Cellular this spring for $4.4 billion; however, lawmakers have moved to potentially block the union.
In a letter to the Department of Justice and FCC, U.S. Senators demanded the regulators scrutinize the merger: “Since T-Mobile acquired Sprint in 2020, three carriers have controlled essentially the entire national mobile wireless service market. If approved, T-Mobile’s proposed $4.4 billion acquisition of US Cellular would further deplete competition in the industry, combining the third and fourth largest wireless carriers (by facilities-based subscribers).”
Source: Business Research Company
Despite these political headwinds, AT&T has moved ahead with their transaction as T-Mobile fights on. Along with Verizon, which is acquiring other U.S. Cellular spectrum licenses, the Big 3 U.S. wireless companies are moving to capture the immense – and growing – wireless market.
According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, U.S. Cellular is advised by law firms Wilkinson Barker Knauer LLP, Sidley Austin LLP, Cravath, Swaine & Moore LLP, and Clifford Chance.
