US Cellular is up 10% and TDS is up 18% today with a $1 billion Verizon Spectrum deal

In a strategic move to unlock value from its spectrum portfolio, United States Cellular Corporation (NYSE:USM) announced agreements to sell portions of its remaining spectrum licenses to Verizon Communications Inc. (VZ) for a total of $1 billion. The deal includes 663 million MHz POPs of the 850 MHz spectrum as well as AWS and PCS licenses and will be paid in cash, subject to adjustments. Additionally, US Cellular announced plans to offload 12 million MHz POPs across the CBRS, C-band and 700 MHz B/C block bands to two other unnamed mobile network operators as part of its ongoing efforts to expand operations streamline and focus on core business assets.

These transactions are consistent with US Cellular's previously stated goals to monetize its spectrum holdings, which are not included in its planned $4.4 billion sale to T-Mobile, which is expected to close in mid-2025. The company's CEO, Laurent Therivel, emphasized that these sales will ensure that the spectrum is used to benefit consumers, while also enabling US Cellular to continue to benefit from its remaining assets, which include significant holdings in the lower, medium and mm wave ranges. With Telephone and Data Systems, Inc. (NYSE:TDS) receiving 82% shareholder approval, the deals now await regulatory approval.

This announcement comes amid a broader industry trend where wireless operators like Verizon are focusing on optimizing their spectrum portfolio and core business functions. As US Cellular divests itself of non-core assets, the company is poised to leverage its remaining 20.6 billion MHz POPs of spectrum to drive future growth while retaining the flexibility to pursue additional monetization opportunities. Investors reacted positively: USM shares rose nearly 10% and its largest shareholders, Telephone and Data Systems, gained nearly 18% following the news, reflecting optimism about the company's strategic direction.

This article first appeared on GuruFocus.