Summary
- T-Mobile is reportedly acquiring a large portion of US Cellular’s operations, intensifying competition.
- Verizon could potentially acquire the rest of US Cellular’s remaining assets, but a deal is uncertain.
- Large carriers dominate the US market with better coverage, data plans, and device deals, and the options are continuing to shrink outside of MVNOs.
America’s largest wireless carriers keep getting bigger, as they have the most active users and some of the best coverage within the US, meaning that there’s little to no chance for other smaller carriers to compete against the likes of Verizon, T-Mobile, and AT&T, who offer excellent data plans and device deals. Competition has intensified after the Magenta carrier’s merger with Sprint in 2020 and its recent acquisition of Mint Mobile. Still, it seems that T-Mobile isn’t stopping there, as new information suggests it will acquire part of another regional wireless carrier, with Verizon taking up what’s left.
T-Mobile just completed its acquisition of Ryan Reynolds’ MVNO, Mint Mobile
The purchase brings new perks for current and future Mint subscribers
The future of US Cellular, a regional wireless carrier, hangs in the balance. It is rumored to be preparing to sell its operations and spectrum licenses to T-Mobile and Verizon. According to The Wall Street Journal, if this deal goes through, both buyers would gain access to the company’s wireless spectrum licenses. Of course, each operation is being carried out separately, with Magenta getting closer to signing a deal that could be closed in the upcoming weeks, and an estimated value of $2 billion for a nice piece of the pie.
In contrast, Verizon’s transaction is expected to take longer, and some even believe that might not happen, which could end up hurting the split-sale structure of this operation. Remember that any acquisition has to be approved by antitrust authorities, who will determine whether or not this deal will hurt the competition. Either way, Verizon will remain the largest US carrier, followed closely by T-Mobile, which seems to be determined to take the first spot.
Why is US Cellular giving up?
Source: US Cellular
US Cellular currently serves more than four million customers across 21 states. It has a market value of $3 billion. Still, the rising value of wireless licenses makes it hard to compete in this business, as some companies have spent more than $100 billion to grab hold of the necessary technology and tools to provide fast and efficient services. The market has also evolved, as the largest carriers now sell devices with subscription plans and installments, keeping them locked to this or that network, making it harder for small fish to survive in a tank with three massive sharks.
