T-Mobile CEO Sievert shuts down rumors of a UScellular acquisition without closing the door
Last year UScellular was reportedly put up for sale and according to the rumor mill, T-Mobile was kicking the tires on a potential purchase. The goal was to help T-Mobile reach its goal of a 20% market share in rural America by 2025. In September, when this rumor started spreading, T-Mobile had 16.5% of the rural market.
When the carrier's CEO Mike Sievert was asked whether T-Mobile would speed up its rural game plan if an asset was available, the executive said, "Maybe, but I like our Plan A a lot." He also stated that "the hurdles for M&A would be high" which could have meant financial hurdles or regulatory hurdles. The rumors have died down since then although SDx Central reports that something big happened during the company's recently held fourth-quarter earnings call.
During the call, T-Mobile CFO Peter Osvaldik said that the wireless provider will continue to look at its "capital allocation methodology," which looks for the highest value-creating opportunities that the company has. This includes continuing to invest in its network, and the growth of its main and "adjacent businesses." The executive continued by saying, "Then, of course, we’ll look at all other things beyond that, whether that’s in the fiber space, whether that’s the UScellular's, we'd look at that process and see are there value-creating opportunities."
T-Mobile CEO Mike Sievert
The fifth-largest wireless carrier in the States, UScellular is owned by Telephone and Data Systems Inc. which announced last year that it is exploring "strategic alternatives" for its wireless operations. T-Mobile might have some competition for UScellular. Even though Dish Networks is in the midst of having serious monetary problems, Tom Cullen, Executive Vice President of corporate development at Dish, gave some good reasons why his company would be interested in UScellular.
"They have towers, they have spectrum and they operate in geographies that we haven’t fully built out so it’d be something that we’d be interested in looking at," Cullen said. And the very same reasons could apply to T-Mobile's interest in the company.
But like he did back in September, Sievert shut down the rumors without completely closing the door. "There’s no big deal on the horizon that we see that would knock us off our pace, and I think that’s important calculus," Sievert said. "If something presented itself, it made a lot of sense for shareholders, our job is to bring it to you. But right now, we don’t see it."
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