US Cellular Corporation has enteredan agreement with Verizon Communications (Verizon) to sell a portion of its retained spectrum licenses for a total consideration of USD 1.0 billion in cash. Additionally, UScellular has enteredagreements with two other mobile network operators for the sale of other selected spectrum licenses. These transactions are part of the strategy UScellular announced on May 28, 2024, to opportunistically monetise spectrum not included in the proposed sale to T-Mobile, as disclosed in a filing on Friday.

Verizon Acquires Spectrum Licenses

The deal involves Verizon purchasing spectrum licenses in the cellular band, as well as licenses for spectrum in the cellular, AWS, and PCS bands. The agreement is subject to conditions and potential adjustments, which could occur if court orders prevent the transfer of certain licenses, if regulatory approvals impose burdensome conditions, or if there are changes related to a T-Mobile Short-Term Spectrum Manager Lease.

Specifically, UScellular agreed to sell Verizon 663 million MHz POPs of its Cellular (850 MHz) spectrum licenses, as well as 11 million MHz POPs of its AWS and 19 million MHz POPs of its PCS licenses, for a total of USD 1.0 billion. The purchase price will be payable in cash and may be subject to adjustments as per the purchase agreement.

Agreements with Additional Mobile Operators

In addition, UScellular has reached agreements to sell a total of 12 million MHz POPs of its spectrum licenses across the CBRS, C-Band, and 700 MHz B/C Block bands to two additional mobile network operators. These transactions are also subject to regulatory approval and the satisfaction of customary closing conditions, though the buyers and specific terms have not been disclosed.

Each of these transactions is contingent upon the closing of UScellular's proposed sale of its wireless operations and spectrum assets to T-Mobile.

"We are pleased that significant value for a portion of the remaining licenses will be realized,” said the CEO of UScellular, "and, importantly, that these agreements with multiple mobile network operators ensure that this spectrum will be put to work for consumers throughout the country. We are continuing the process to opportunistically monetise the remaining spectrum assets not included in today’s announcement."

Remaining Spectrum of UScellular

Following these transactions, UScellular's retained spectrum will include 3.4 billion MHz POPs of low and mid-band spectrum (700 MHz, 3.45GHz, CBRS, and C-Band), along with 17.2 billion MHz POPs of mmWave spectrum. UScellular will continue to explore opportunities to monetise these retained assets, according to the statement.

The agreement also includes specific termination rights. Both Verizon and UScellular can terminate the deal if it does not close by December 31, 2026, although extensions may be possible. Additionally, Verizon may withdraw from the deal if regulatory approvals impose excessive conditions.

Verizon Tower Assets Deal

Earlier in October, Verizon entereda USD 3.3 billion agreement with Vertical Bridge to lease, operate, and manage 6,339 wireless towers across all 50 states and Washington, DC, from Verizon subsidiaries.

UScellular - T Mobile Deal

US Cellular's May 2024 deal with T-Mobile was valued at USD 4.4 billion, including both cash and debt. Under the terms of that agreement, T-Mobile will acquire UScellular's wireless operations (mobile customers and stores) along with approximately 30 percent of its spectrum assets across several bands.

Regulatory Approvals

The closure of the newly announced deal is subject to regulatory approvals, including antitrust clearance under the Hart-Scott-Rodino Act and Federal Communications Commission (FCC) approval. Additionally, the T-Mobile-related transactions must also close before Verizon completes its purchase.

UScellular

Chicago-based United States Cellular Corporation provides a range of wireless products and services to 4.5 million retail customers across 21 states. As of the end of the second quarter of 2024, Telephone and Data Systems (TDS) owns approximately 82 percent of UScellular.