As Dish looks to enter the wireless business, one Wall Street firm is reporting the company may be eyeing TDS for acquisition. The main motivation for any Dish acquisition of TDS would be US Cellular.
TDS is the parent company of both US Cellular and TDS Telecom. US Cellular is the fourth-largest wireless carrier in the U.S. US Cellular could provide Dish with significant wireless assets as it looks to build a nationwide 5G network.
Dish is currently building out its network and will need to rely on a roaming agreement with T-Mobile for broader coverage. The report from Wall Street firm Citi suggests that Dish buying TDS would lessen reliance on the T-Mobile network, especially in smaller markets, and may actually be a cheaper option.
At the end of 2020, US Cellular counted 4.4 million postpaid subscribers and close to 500K prepaid. The company is located at 6,797 cell sites and owns and operates 4,271 towers. US Cellular also has broad spectrum holdings including millimeter wave, CBRS, and C-Band.
Like most wireless carriers, US Cellular is embarking on its own 5G buildout. The carrier reports 5G was available to 24% of all its cell sites at the end of 2020.
Citi also suggests that if Dish acquires TDS it may look to sell off TDS’ wireline broadband operations, both fiber and cable, which could hold a lot of value, creating monetization strategies for Dish.
A Dish acquisition of TDS could be a significant investment. Both US Cellular and TDS are publicly traded companies, although TDS has a controlling share of US Cellular. Based on share price, US Cellular currently has a market cap of close to $3 billion, while TDS has a market cap of $2.3 billion — which suggests that buying TDS could be the best means of gaining control of US Cellular.