AT&T is getting a piece of the pie from the split of UScellular. The company has signed an agreement to purchase low band 700MHz and mid band 3.45GHz spectrum from UScellular for a transaction value of $1.01 billion.
Last month, Verzion announced that it would spend $1 billion to acquire spectrum in the UScellular 850MHz and AWS frequency bands. This transaction originated from T-Mobile’s announcement in May to acquire approximately 30% of the US cellular spectrum, including 600MHz to 700MHz, AWS, 2.5GHz, and 24GHz frequency bands. T-Mobile also acquired all customers and retail stores of UScellular for $4.4 billion.
These three transactions still require approval from regulatory authorities.
“Like other mobile network operators, we believe AT&T can effectively utilize its spectrum in communities across the United States, “said Laurent Therivel, CEO of UScellular.
So far, apart from millimeter wave spectrum, UScellular has sold approximately 70% of its spectrum assets. It is currently unclear whether other buyers will acquire the remaining spectrum licenses.
AT&T is the only large 5G network operator to incorporate the 3.45GHz mid frequency spectrum into its network. T-Mobile announced last month that the 3.45GHz spectrum is not suitable for its 5G plan. Therefore, the company recently agreed to sell all of its 3.45GHz shares, primarily to Columbia Capital.
On the contrary, T-Mobile is using 2.5GHz and C-band spectrum as the mid frequency layer for its 5G network. The mid frequency spectrum is considered crucial for 5G connectivity as it can cover large geographic areas and quickly transmit large amounts of data.
AT&T is splitting its mid frequency 5G network construction into C-band and 3.45GHz spectrum. AT&T is the largest bidder in the FCC 3.45GHz spectrum auction. (Prior to this, Verizon was the big winner in the FCC C-band auction and is currently building its own mid frequency 5G network specifically around these C-bands.)
Financial analysts at New Street have warned that AT&T is now approaching the 40MHz spectrum aggregation ownership limit set by the FCC for its 3.45GHz spectrum auction.
On Thursday, after AT&T announced a new spectrum agreement with UScellular, analysts wrote in a report to investors: “Aggregation restrictions will not expire until January 2026. AT&T either hopes to obtain an exemption from the Federal Communications Commission to complete the transaction before then, or they will only complete the transaction after January 2026.”
New Street estimates that the remaining spectrum value held by UScellular is approximately $1.8 billion. The company is still working hard to sell its mobile signal tower business.