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T-Mobile open to U.S. Cellular acquisition, CEO says

Company isn't ruling out a play for the rural wireless phone provider.

Company isn't ruling out a play for the rural wireless phone provider.

A customer support employee for wireless phone provider T-Mobile. (Courtesy image)
A customer support employee for wireless phone provider T-Mobile. (Courtesy image)

T-Mobile is not ruling out a possible acquisition or rural-focused wireless phone provider U.S. Cellular, the company’s chief executive said at an investor conference this week.

The affirmation came several weeks after U.S. Cellular parent company Telephone and Data Systems (TDS) said it was exploring “strategic alternatives” for the wireless phone brand, which primarily targets residential and business customers in underserved parts of the country.

U.S. Cellular counts just under 5 million customers across 21 states, and is considered the fourth-largest wireless phone provider in the country, behind T-Mobile, AT&T and Verizon (but ahead of Dish Wireless, which still primarily operates as a mobile virtual network operator, or MVNO, that relies on AT&T and T-Mobile’s network to serve its customers).

At an investor conference this week, T-Mobile CEO Mike Sievert was asked if he might make a play for an unnamed rural wireless provider — largely believed to be U.S. Cellular — should it become available.

“Maybe,” Sievert said through a chuckle. “But I like our Plan A a lot.”

That “Plan A” involves leveraging spectrum T-Mobile has amassed over the years — to include some acquired through its merger with Sprint several years ago — to build out a robust fifth-generation (5G) wireless network that better serves its phone and data-hungry customers.

The build-out has allowed T-Mobile to expand beyond traditional wireless phone service, to include the launch of a relatively-new fixed wireless home and business Internet service that leverages the power of its 5G network.

While rivals AT&T and Verizon primarily concentrate their efforts on reaching consumers in urban and suburban areas, T-Mobile has targeted rural consumers with its marketing, with promises to bridge the broadband divide by offering fixed wireless products in areas of the country where land-based broadband solutions might not be available anytime soon.

That effort has paid off over the last few years, with T-Mobile increasing its rural market share from 13 percent in 2021 to around 16.5 percent today, Sievert affirmed on Wednesday. T-Mobile is projecting its rural market share will grow even further to 20 percent within two years.

“Our organic strategy is really attractive,” Sievert said, noting T-Mobile has strong momentum in rural areas where it primarily competes with upstart fixed wireless solutions from Verizon.

In other areas of the market, T-Mobile is targeting price-conscious consumers with its prepaid offerings under its own brand and Metro by T-Mobile. Its acquisition strategy largely centers around this sector of the business, with T-Mobile announcing in March it was acquiring Ka’ena Corporation, the company behind the budget prepaid services Mint Mobile and Ultra Mobile.