Official Tmobile-Sprint merger discussion thread

[dkyeager]

Not certain how good of a deal this is until we see the actual licenses. Note that FRN 0002844595 has a ton of CF microwave licenses, so 30% might be much better than it sounds.

[Trip]

From the investor relations slide:

"T-Mobile will acquire approximately 30% of UScellular’s spectrum portfolio, including all of the company’s 600 MHz(1), 2.5 GHz and 24 GHz, as well as the majority of its 700 MHz A Block, AWS and PCS holdings"

https://imgur.com/a/KU8cCFO

https://s24.q4cdn.com/321867585/files/doc_presentations/2024/Sale-of-Wireless-Operations-Presentation.pdf

- Trip

[dkyeager]

From UScellular and TDS conference call:

$60 million breakup fee.

30 month leases on some sites which can be canceled at any time.

Additional spectrum sales possible at any time. Expect a high amount of demand.

Will be trying to build tower colocation business.

Optimistic about approval because of customer better pricing and performance.  Offers will be extended to a significant number of associates. 30% of spectrum was structured to mitigate approval issues.

 

[Paynefanbro]

Looks like T-Mobile is consolidating around 24GHz for mmWave. Curious to know what their plans are for that. 

[dkyeager]

1 hour ago, Paynefanbro said:

Looks like T-Mobile is consolidating around 24GHz for mmWave. Curious to know what their plans are for that. 

My gut opinion is they are waiting for technology improvements. C-band is seeing some of those emerge now which will extend its useful range and carrying capacity.  Given it current short range, 24GHz is best for places where people are seated in sizeable numbers, although I would not rule out business pico cells. Of course, Verizon is using mmWave small cells quite well for FWA by placing them outside large apartment buildings that only allow one ISP with outrageous charges.

UScellular and some Verizon have been using it to do the job of microwave links to preserve licences (4 needed per county).

Edited May 28 by dkyeager
Last paragraph added. Verizon FWA comment.

[Trip]

2 hours ago, dkyeager said:

30 month leases on some sites which can be canceled at any time.

The way I heard it, these were for sites that T-Mobile would not be keeping, and presumably is how they would handle decommissioning the equipment from them. 

This would presumably happen because they're already on the tower or on an adjacent tower. 

For example, in Keysville, VA, T-Mobile is on a tower directly adjacent to the existing US Cellular-owned tower.

https://maps.app.goo.gl/kefNy451QXYFSqi5A

T-Mobile at left; at right is the US Cellular-owned tower with both US Cellular and Verizon gear on it.

- Trip

[RedSpark]

5 hours ago, schmidtj said:

Here's the T-Mobile Announcement:

T-Mobile to Acquire UScellular Wireless Operations and Deliver Exceptional Value, a Superior 5G Experience and Unparalleled Benefits to Millions of Customers

Transaction Details and Financial Profile

T-Mobile will pay approximately $4.4 billion for the assets being acquired from UScellular in the transaction in a combination of cash and up to $2.0 billion of debt to be assumed by T-Mobile through an exchange offer to be made to certain UScellular debtholders prior to closing. To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular and the cash portion of the purchase price will be correspondingly increased. Following the closing of the transaction, UScellular will retain ownership of its other spectrum as well as its towers, with T-Mobile entering into a long-term arrangement to lease space on at least 2,100 additional towers being retained. T-Mobile does not expect the transaction to impact the company’s 2024 guidance or 2024 authorized shareholder return program. T-Mobile expects this transaction will yield approximately $1.0 billion in effective total opex and capex annual run rate cost synergies upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion. The company plans to reinvest a portion of synergies toward enhancing consumer choice, quality and competition in the wireless industry.

The transaction, which is subject to the satisfaction of customary closing conditions and receipt of certain regulatory approvals, is expected to close in mid-2025.

[iansltx]

Here's the spectrum breakdown by band. There's some 2.5 in there as well.

The remaining spectrum is definitely enough to keep running FWA on while finding a buyer, and since the towers aren't conveying with the subs and spectrum there's nothing stopping USCellular from competing with T-Mobile on FWA until Verizon or AT&T decide the spectrum is valuable enough to take off TDS's hands.

If they go that route, I wouldn't be surprised if FWA gets rebranded under TDS.

[dkyeager]

1 hour ago, iansltx said:

Here's the spectrum breakdown by band. There's some 2.5 in there as well.

The remaining spectrum is definitely enough to keep running FWA on while finding a buyer, and since the towers aren't conveying with the subs and spectrum there's nothing stopping USCellular from competing with T-Mobile on FWA until Verizon or AT&T decide the spectrum is valuable enough to take off TDS's hands.

If they go that route, I wouldn't be surprised if FWA gets rebranded under TDS.

It would not surprise me if T-Mobile leases UScellular's used spectrum while converting sites for up to a year.

[dkyeager]

Nice map in this article. Actual spectrum holding may exceed map.

https://www.lightreading.com/5g/t-mobile-goes-for-uscellular-s-spectrum-customers-with-4-4b-deal

https://www.fierce-network.com/wireless/t-mobile-buy-most-uscellular-44b

 

[dkyeager]

Etner thinks T-Mobile got UScellular cheap: https://www.mobileworldlive.com/t-mobile-us/t-mobile-us-strikes-4-4b-deal-to-buy-uscellular-mobile-assets/

[chamb]

3 hours ago, dkyeager said:

Etner thinks T-Mobile got UScellular cheap: https://www.mobileworldlive.com/t-mobile-us/t-mobile-us-strikes-4-4b-deal-to-buy-uscellular-mobile-assets/

They did not necessarily get it cheap if you think about all the future expense to probably rip and replace all the USC cell sites. When the t-Mobile/Sprint deal happened, in many cases the entire Sprint site was removed. Every last piece of the Sprint gear was loaded on a big trailer and hauled away. A totally new install was done with very expensive equipment and the service improved by a large degree.  This was not cheap to accomplish this.

I live in the old Shentel region which has some higher traffic sites but also some very rural sites. Thanks to Shentel's past work, the service was actually very good. They took the time to figure it out and built sites at great cost in rural areas. 

Surprisingly, T-Mobile did NOT go cheap and fail to improve on the already good service. Service definitely got better with T-Mobile. 

It would not be unreasonable to think that T-Mobile will do the same exact thing with the USC sites. It will be expensive so it is not fair to say that T-Mobile will be getting things cheap.  I seriously doubt that any other buyer would upgrade all the USC sites and do it right.

I really did not have a good opinion of the old T-Mobile network before the Sprint combination, but now, I think highly of the new T-Mobile.  They surprised me in a big way.  USC customers should have the same great service and T-Mobile will step up. They will spend the money and time to give them this great service.

[dkyeager]

T-Mobile had $9 billion set aside and wanted to increase its rural growth.  T-Mobile performed poorly in the UScellular areas. Should they have done organic growth or is this a better deal? Certainly quicker, especially with customers and spectrum.

This article look at the estimate total costs: https://insidetowers.com/market-analysts-look-at-t-mobile-uscellular-deal/

..."According to Jonathan Chaplin of New Street Research, the announced deal value is $4.4 billion, with T-Mobile paying $2.4 billion in cash and assuming $2.0 billion of debt. However, if T-Mobile acquires all the 600 MHz portfolio, which Chaplin said he assumes they will, “They will owe an additional $106 million,” he said. “This means the total transaction value is $4.5 billion.”

“Looking at the transaction from the perspective of T-Mobile,” Chaplin said, “we assume the tower leases have a clear business purpose and so we are not treating the new leases as part of T-Mobile’s deal consideration. T-Mobile has cost-to-achieve of $2.2 to $2.6 billion, which we do think of as part of the cost of the assets to T-Mobile. This puts T-Mobile’s total transaction purchase price at $6.9 billion.”...

...“Will the FCC and DOJ allow a transaction that will put T-Mobile above the FCC’s spectrum ownership “soft cap” in select markets?” Moffett queried. “We don’t know. But it is clear that spectrum concentration concerns are at the very top of the list of issues that made this transaction take so long to announce. The (negative) read-through for the spectrum market here is obvious.”...

[Trip]

It seems to me that if the goal is to improve rural, the US Cellular buy-out would get them only part of the way there, considering there are plenty of rural areas that US Cellular does not serve.  But I also have a hard time reading it the way I think that article is, that the cost of this deal comes straight out of the $9 billion.  I mean, they're getting spectrum for their existing operations in US Cellular markets, including places that I wouldn't call rural.  (Roanoke, VA is the 9th largest city in the state, for example.)  It seems like some of it should be allocated to rural expansion, but certainly not the whole purchase price.

There's also something to be said for getting the customer base of potentially sticky customers who have been used to US Cellular being the only game in town for potentially decades.

- Trip

[chamb]

3 hours ago, Trip said:

It seems to me that if the goal is to improve rural, the US Cellular buy-out would get them only part of the way there, considering there are plenty of rural areas that US Cellular does not serve.  But I also have a hard time reading it the way I think that article is, that the cost of this deal comes straight out of the $9 billion.  I mean, they're getting spectrum for their existing operations in US Cellular markets, including places that I wouldn't call rural.  (Roanoke, VA is the 9th largest city in the state, for example.)  It seems like some of it should be allocated to rural expansion, but certainly not the whole purchase price.

There's also something to be said for getting the customer base of potentially sticky customers who have been used to US Cellular being the only game in town for potentially decades.

- Trip

Sticky Customers - YES, and leave them flip to the T-Mobile PLMN when needed and they will be even more likely to Stick.

[cooltech6597]

On 4/26/2024 at 4:53 PM, cooltech6597 said:

Hopefully this indicates T-Mobile hasn't completely abandoned mmwave and/or small cells? But then again this is the loop, so take that as you will. Hopefully now that most macro activity is done (besides rural colo/builds), they will start working on small cells. 

 

Forgot to post this, but a few weeks ago I got to visit these small cells myself! They're spread around Grant park and the surrounding areas, but unfortunately none of the mmwave cells made it outside of the parks along the lake into the rest of downtown. I did spot some n41 small cells around downtown, but they seemed to be older deployments limited to 100mhz and performed poorly.

 

 

[iansltx]

Continuing the USCC discussion, if T-Mobile does a full equipment swap at all of USCC's sites, which they probably will for vendor consistency, and if they include 2.5 on all of those sites, which they probably will as they definitely have economies of scale on the base stations, that'll represent a massive capacity increase in those areas over what USCC had, and maybe a coverage increase since n71 will get deployed everywhere and B71 will get deployed any time T-Mobile has at least 25x25, and maybe where they have 20x20.

Assuming this deal goes through (I'm betting it does), I figure I'll see contiguous coverage in the area of southern IL where I was attempting to roam on USCC the last time I was there, though it might be late next year before that switchover happens.

[Trip]

On 6/1/2024 at 1:53 PM, iansltx said:

Continuing the USCC discussion, if T-Mobile does a full equipment swap at all of USCC's sites, which they probably will for vendor consistency, and if they include 2.5 on all of those sites, which they probably will as they definitely have economies of scale on the base stations

They didn't do all 2.5 with the Sprint merger, so I'm not sure why they would do that for USCC in areas arguably more rural.

But I'm 100% sure they'll swap out the gear.

- Trip

[chamb]

3 hours ago, Trip said:

They didn't do all 2.5 with the Sprint merger, so I'm not sure why they would do that for USCC in areas arguably more rural.

But I'm 100% sure they'll swap out the gear.

- Trip

Totally agree.  In my county and surrounding counties, TM did not place n-41 on every site.  When I look at the sites in question, I probably would have not placed it there either.  I can find just a few with n-71 only and in most of those cases if you live there and know the probable usage of the residents, you would not do a full upgrade on those sites.  One site in particular is set up to force feed n-71 through a long tunnel on the Turnpike.  No stopping allowed in the tunnel. No stores, movie theaters, bathrooms, so n41 would be a waste.    n25 is not really needed either, so it is not there.  The tunnel is going through & under a mountain with more black bears than people.  TM was smart.  Get good coverage in the tunnel but do not waste many many thousands of dollars with extra unused spectrum.

I also see sites with only n71 & n25.  Again this makes sense to me.  Depending on what county we are talking about, they moved much of their b25 from LTE to nr.  Some counties have more n25 than a neighboring county, but luckily, it is plenty everywhere.   When you are in a very rural area, n41 can run up the bills and then be barely used.  I am NOT finding sites that should have had n41 but TM failed to provide it.  They may have to come back later in a few years and upgrade the site to n41.  However, we just may eventually see the last little piece on Band 25 leave LTE and move to n25. I am not sure if the satellite to phone service is using band 25 G block as LTE or nr.

We also can possibly have at least some AWS move from LTE to nr at some point.  Yes, everybody wants n41. it is not justified in some cases.  When I travel, I desire some decent service along the entire route but it does not have to be 1 or 2 gig download.   If I can get 50/5 on a speedtest with data that will flow and not stutter, I am very happy.

Yes, they will swap out the USC gear.  TM needs to match their existing network. The USCC equipment did the job for years, but it is time to retire it.

[dkyeager]

T-Mobile UScellular agreement links from SEC filings: https://www.sec.gov/ix?doc=/Archives/edgar/data/821130/000110465924065665/tm2415626d2_8k.htm

Look inside for main link.

Credit mdav-dos1 on reddit

[dkyeager]

T-Mobile has saved its 28Mhz mmWave licenses by using the point to point method to do environment monitoring inside its cabinets. The attachment below shows the antennas used:

https://wireless2.fcc.gov/UlsApp/ApplicationSearch/applAdmin.jsp;JSESSIONID_APPSEARCH=LxvbnJuvusmIklPhKy6gVK7f9uwylrZ8LiNf3BqIKlDp3_5GxoBr!300973589!225089709?applID=14787154#

 

Here are the sites for Franklin county OH:

https://wireless2.fcc.gov/UlsEntry/attachments/attachmentViewRD.jsp?applType=search&fileKey=66518254&attachmentKey=21989782&attachmentInd=applAttach

[dkyeager]

https://www.lightreading.com/satellite/spacex-says-t-mobile-s-direct-to-cell-service-launching-commercially-this-fall

Based on FCC filing. SpaceX supports carriers in other countries, but I doubt they would need to report that to the FCC.

[schmidtj]

1 hour ago, dkyeager said:

https://www.lightreading.com/satellite/spacex-says-t-mobile-s-direct-to-cell-service-launching-commercially-this-fall

Based on FCC filing. SpaceX supports carriers in other countries, but I doubt they would need to report that to the FCC.

So how does this whole direct to satellite thing fit in with the way it works now? Carriers spend billions for licenses for specific areas. So now T-Mobile can offer service direct to customers without having a Terrestrial license first?

[Paynefanbro]

3 minutes ago, schmidtj said:

So how does this whole direct to satellite thing fit in with the way it works now? Carriers spend billions for licenses for specific areas. So now T-Mobile can offer service direct to customers without having a Terrestrial license first?

T-Mobile owns the PCS G-block across the contiguous U.S. so they can just use that spectrum to broadcast direct to cell. Ideally your phone would only connect to it in areas where there isn't any terrestrial service available.

[swintec]

1 hour ago, Paynefanbro said:

T-Mobile owns the PCS G-block across the contiguous U.S. so they can just use that spectrum to broadcast direct to cell. Ideally your phone would only connect to it in areas where there isn't any terrestrial service available.

will this work for service in a plane?