Verizon Spending Spree Continues: Telecom Giant To Buy $1B In US Cellular Assets

The telecom market has been in flux in 2024 as T-Mobile plans to buy U.S. Cellular for $4.4 billion and Verizon buys Frontier Communications for $20 billion. Ahead of the U.S. Cellular/T-Mobile deal, Verizon revealed plans to scoop up some of US Cellular Corp.’s spectrum licenses for $1 billion.

Telecom giant Verizon, on the heels of its $20 billion Frontier Communications megadeal, has agreed to buy up a portion of U.S Cellular Corp.’s spectrum licenses for $1 billion as the mobile network operator sheds parts of its portfolio in preparation of its own deal to be acquired by T-Mobile.

The pending transaction is contingent on the closing of Bellevue, Wash.-based T-Mobile's acquisition of U.S. Cellular for $4.4 billion including cash and debt that was announced in May. That deal includes substantially all of U.S. Cellular's wireless operations, customers and stores, as well as certain specified spectrum assets.

Verizon, for its part, last month revealed plans to acquire Frontier Communications in an all-cash deal valued at $20 billion. The carrier hopes that the deal for Dallas-based Frontier, which is in the backyard of Verizon's largest rival AT&T, will help win Verizon more telecommunications market share.

Via the terms of Friday's deal, U.S. Cellular will sell 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 $1.0 billion. Verizon’s fiber network is primarily located in the Northeast and mid-Atlantic regions of America.

Verizon CEO Hans Vestberg has said that fixed wireless and AI are two big pieces of his company's growth strategy in 2024 and beyond.

The deal is subject to the receipt of regulatory approvals and customary closing conditions, according to the two companies.

"We are pleased that significant value for a portion of the remaining licenses will be realized … We are continuing the process to opportunistically monetize the remaining spectrum assets not included in today's announcement," said Laurent Therivel, U.S. Cellular' s president and CEO, in a statement.

U.S. Cellular, which has about 4.5 million retail connections in 21, is the fifth largest wireless carrier in the country. The telecom firm has entered into agreements with two other unnamed mobile network operators for the sale of other selected spectrum licenses ahead of its T-Mobile tie-up, U.S. Cellular announced on Friday.