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Summary
- T-Mobile is expected to shell out $1.95 billion for acquiring Shentel’s wireless business.
- The acquisition of Shentel would also result in the addition of 1.1 million subscribers to T-Mobile.
Mobile telecom company T-Mobile has finally settled upon a price with Shentel or Shenandoah Telecommunications Company to purchase its wireless assets. T-Mobile is expected to shell out $1.95 billion for acquiring Shentel’s wireless business. The agreement on the price was reached after a thorough assessment process.
The agreement called for the base purchase price to be 90 per cent of the entire business value of the wireless assets, which was nearly $2.10 billion. The acquisition is expected to be completed by Q2 of 2021, provided T-Mobile and Shentel receive a go-ahead from regulatory bodies, and customary closing conditions are met.
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The acquisition of Shentel would also result in the addition of 1.1 million subscribers to T-Mobile that might unlock more value for the US telecom giant. T-Mobile is expected to come up with a further announcement on acquisition of Shentel and economic outlook for this year soon.
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Last year, after Sprint merger was finalised, T-mobile revealed its intentions to acquire Shentel’s wireless assets. Shentel has been associated with the Sprint brand for more than two decades. As of June 2020, Shentel has a strong subscriber base of 1.1 million. The Virginia-headquartered company specialises in wireline and cable services.
Shentel’s wireless business delivered EBITDA of $217 million for 2020. Market experts believe that Shentel is expected to gain around $1.5 billion from this transaction and can use these proceeds to make dividend payments, acquire other companies and grow its fixed-line broadband business.
Experts believed that T-Mobile is in good shape, despite the massacre caused by the pandemic. During the third quarter of 2020, T-Mobile managed to add 689,000 postpaid customers beating the Wall Street projections. Moreover, T-Mobile expects to add another 1.4 million postpaid customers during the second half of 2020. From T-Mobile’s perspective, the acquisition of Shentel’s wireless business could help it expand its customer base and help it in winning spectrum licenses that are worth billions of dollars.
Neville Ray, T-Mobile’s President of Technology, on Tuesday tweeted that the carrier has rolled out 5G services in Tampa, Florida, as the city will be hosting Super Bowl 55 kicks-off in February. The company is excited to bring the speedier 2.5 GHz service to the Raymond James Stadium, which will host the event.
