T-Mobile's $4.4B US Cellular And TDS Deal Promises Enhanced Rural 5G Coverage

T-Mobile's $4.4B US Cellular And TDS Deal Promises Enhanced Rural 5G Coverage

T-Mobile US, Inc (NASDAQ:TMUS)  agreed to acquire substantially all of United States Cellular Corp’s (NYSE:USM) and Telephone and Data Systems, Inc. (NYSE:TDS) wireless operations, including wireless customers and stores, as well as certain specified spectrum assets for $4.4 billion in the transaction in a combination of cash and up to $2.0 billion of debt.

Under the contract, T-Mobile’s 5G network will expand to provide millions of US cellular customers, particularly those in underserved rural areas.

Under the deal, UScellular will retain ownership of its other spectrum and towers, and T-Mobile will enter into a long-term arrangement to lease space on at least 2,100 additional towers.

Also Read: Wireless Giants T-Mobile, Verizon Consider $2B US Cellular Deal: Report

T-Mobile expects this transaction to yield $1.0 billion in effective total operating expenditure and capital expenditure annual run rate cost synergies upon integration, with the total cost to achieve the integration currently estimated at $2.2 billion – $2.6 billion.

Mike Sievert, CEO of T-Mobile. “As customers from both companies will get more coverage and more capacity from our combined footprint, our competitors will be forced to keep up – and even more consumers will benefit.”

In April, T-Mobile US reported first-quarter sales of $19.59 billion, down by 0.19% year-on-year, which missed the analyst consensus of $19.81 billion.

It clocked EPS of $2.00, which beat the analyst consensus of $1.89. The company reported quarterly postpaid net account additions of 218,000.

Price Action: TMUS shares traded lower by 0.28% at $165.53 premarket at the last check Tuesday. TDS shares were up 17.2% at $22, and USM shares were trading higher by 12.80% to $48.50.

Also Read: Microsoft’s Move in Telecom – 5G Partnership with Etisalat and AI Innovations Reshape Industry

Photo by viewimage on Shutterstock

"ACTIVE INVESTORS' SECRET WEAPON" Supercharge Your Stock Market Game with the #1 "news & everything else" trading tool: Benzinga Pro - Click here to start Your 14-Day Trial Now!

Get the latest stock analysis from Benzinga?

This article T-Mobile's $4.4B US Cellular And TDS Deal Promises Enhanced Rural 5G Coverage originally appeared on Benzinga.com

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.