UPDATE The Department of Justice’s (DoJ) antitrust division cleared T-Mobile US’ (NASDAQ: TMUS) $4.4 billion acquisition of UScellular (NYSE: USM). The decision came after the purchaser ended its diversity, equity and inclusion practices that Inside Towers reported.
However, the clearance came with a warning about industry concentration. Assistant Attorney General Gail Slater of the Justice Department’s Antitrust Division said, “The investigation nevertheless raised concerns about competition in the relevant markets for mobile wireless services and the availability of wireless spectrum needed to fuel competition and entry. Specifically, as part of the investigation, the Department considered the potential impact on consumers resulting from the elimination of UScellular from the market, the potential for consumer benefits, and the potential impact of the further consolidation of wireless spectrum.”
Slater explained, “UScellular’s inability to maintain its competitive position would result in declining value to its subscriber base, whereas the transaction offers them hope that they will be able to experience the benefits of a more robust cellular network.”
But Slater also warned of concentration in the industry, with three major players T-Mobile, Verizon (NYSE: VZ) and AT&T (NYSE: T). “This transaction, and two other deals contingent on its closing, will consolidate yet more spectrum in the Big 3’s oligopoly, which controls more than 80 percent of the mobile wireless spectrum in the country,” she said. “The Department investigated these spectrum transfers and concluded that they would not result in sufficient harm to competition to warrant an enforcement action, yet the risks to future competition due to further spectrum aggregation by the Big 3 are acute.”
The $4.4 billion transaction was announced in May 2024. T-Mobile is paying $2.4 billion in cash and will take over responsibility for $2 billion in UScellular debt. The deal also gives T-Mobile 30 percent of UScellular’s spectrum assets including licenses in the 600 MHz, 700 MHz A Block, PCS, AWS, 2.5 GHz, and 24 GHz (mmWave) frequencies, Inside Towers reported.
The FCC cleared the deal on Friday. “FCC approval of this transaction is expected to result in substantial network benefits for customers of both T-Mobile and UScellular, including additional capacity and coverage benefits, as well as improved fixed wireless access service with higher speeds and capacity,” FCC Chairman Brendan Carr said.
By Leslie Stimson, Inside Towers Washington Bureau Chief
