Sprint's 4G LTE Spectrum Buying Spree Continues With US Cellular Deal
NEWS ANALYSIS: Sprint has announced plans to buy a small portion of smaller carrier US Cellular in a bid to build up its presence in the Midwest and add to its LTE spectrum holdings.Sprint’s announcement on Nov. 7 that the company would purchase spectrum and customer accounts in the Chicago and St. Louis areas, as well as in other parts of the Upper Midwest from US Cellular, is an effort to get Sprint the LTE spectrum it needs. The deal, funded by a huge investment of money from Japanese wireless carrier SoftBank, will result in Sprint getting about 10 percent of US Cellular including 585,000 US Cellular customers. US Cellular has coverage in the Midwest along with areas in New England and in the Pacific Northwest. The Sprint deal would net US Cellular about $480 million. Sprint would get 20 MHz of LTE spectrum in the PCS bands where Sprint already operates. Ultimately, this deal is about the spectrum that Sprint needs to overcome its currently weak position in LTE spectrum holdings. Sprint currently divides its 4G network among its own limited LTE deployments, WiMax deployments, and 4G deployments owned by Clearwire. Sprint owns slightly less than half of Clearwire.
When the US Cellular deal was first announced, it seemed like a ploy by Sprint to become a larger carrier through acquisition, but once I read through the description of the deal from US Cellular’s viewpoint, it’s clear that Sprint isn’t actually becoming much bigger. While it will be getting a half-million subscribers through the acquisition, those are pretty expensive subscribers and there aren’t enough of them to affect Sprint’s size in terms of competition.