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UScellular, the fifth largest mobile service provider in the US, may be up for auction as its parent company, Telephone and Data Systems (TDS), explores strategic alternatives. TDS has initiated a comprehensive review of UScellular and has hired investment firm Citi as financial advisors to assist with exploring options for the business.

The review process may involve a full sale of UScellular or the introduction of new investors. TDS aims to make decisions that are in the best interest of its shareholders. The strategic review has no specific deadline or timetable, and further announcements will be made as necessary.

UScellular currently serves approximately 4.2 million subscribers across 21 states and employs around 4,600 people. The company has a market capitalization of approximately .65 billion. Potential buyers for UScellular are speculated to be major US telecommunications giants such as T-Mobile, Verizon, or AT&T.

The attractive assets of UScellular include its spectrum holdings, which were bolstered with over a billion dollars’ worth of 5G spectrum purchased in the latest auction. This spectrum could be beneficial for larger operators’ existing 5G services. Additionally, UScellular owns 4,341 mobile towers across the US, assets that have been highly sought after by telcos and private equity investors.

However, UScellular’s fragmented footprint could make it less appealing to individual buyers. Therefore, a piecemeal sale may be more advantageous, with the consumer business potentially being sold to a major telco and the tower infrastructure to a towerco or private equity investor. Another possibility is that UScellular could be acquired by Dish Network to assist with the company’s 5G coverage obligations, although Dish’s current financial situation may hinder such a deal.

The evolution of the US mobile market in 2023 remains uncertain. Join the telecoms ecosystem in discussing this topic at Connected America 2024.

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