UScellular Announces Sale of Spectrum Assets to AT&T

UScellular entered into an agreement with AT&T to sell a portion of its retained spectrum licenses for a total consideration of $1.018 billion.  The transaction is part of the objective UScellular announced on May 28 to monetize the spectrum that was not included in the proposed sale to T-Mobile. It follows the transactions previously announced on October 18 to sell a portion of the retained spectrum licenses to Verizon and two other mobile network operators.

“We are pleased with the significant value that will be realized in the various transactions recently announced,” said Laurent Therivel, UScellular president and CEO. “This agreement adds a fourth mobile network operator, in addition to T-Mobile, to the list of those whose subscribers will benefit from the sale of our spectrum licenses.  As with the other mobile network operators, we are confident that AT&T can put it to productive use in communities throughout the U.S.  Furthermore, the terms of the agreement will ensure that there will be continued, uninterrupted service for UScellular customers in the interim.”

Following this transaction (as well as those previously announced), UScellular will have reached definitive agreements to monetize approximately 55 percent, measured on a MHz-Pops basis, of the spectrum holdings (excluding mmWave) that were excluded from the proposed sale to T-Mobile, for a total consideration of approximately $2.02 billion. Including the proposed T-Mobile transaction, UScellular will have reached agreements to monetize approximately 70 percent of its total spectrum holdings (excluding mmWave), measured on a MHz-Pops basis.

“After our proposed sales, we will be left with 1.86 billion MHz-Pops of low and mid-band spectrum, as well as 17.2 billion MHz-Pops of mmWave spectrum, with the substantial majority of retained value in the C-band spectrum,” said Therivel. “The C-band licenses have a number of attributes that we believe are favorable to their long-term value.  First, our C-band licenses are positioned in an attractive mid-band frequency that can deliver outstanding speed and capacity.  Second, there is a substantial 5G ecosystem of equipment vendors and existing infrastructure that uses C-band.  Finally, they have a lengthy build-out timeline, with first and second build-out dates of 2029 and 2033, respectively.  This provides ample time and optionality for us to either monetize or deploy the spectrum in the future.  We will continue to look for ways to opportunistically monetize the C-band, as well as the other remaining spectrum.”

The AT&T agreement includes the sale of 1,250 million MHz-Pops of 3.45 GHz and 331 million MHz-Pops of 700 MHz B/C block licenses. Substantially all of the transaction is contingent upon the closing of the sale of the UScellular wireless operations and select spectrum assets to T-Mobile and is subject to the receipt of regulatory approvals and satisfaction of customary closing conditions.

Some of the licenses being sold to AT&T are owned by a third party.  Their sale to AT&T is contingent upon UScellular’s purchase, which is pending receipt of regulatory approval, of the equity in the third party that UScellular does not currently own.  Those licenses cover approximately 15% of the total MHz-Pops represented in the announced transaction.

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