T-Mobile provides business update following close of UScellular

T-Mobile provides business update following close of UScellular

T-Mobile (NASDAQ: TMUS) has provided an updated business update following the close of its acquisition of UScellular, which took place on August 1st. The company has announced an increase and acceleration of its long-term synergy expectations, driven by the integration of UScellular's operations into its network.

T-Mobile's COO, Srini Gopalan, stated, "We are pleased to announce that we are both increasing and accelerating our synergy target with UScellular. We are bringing the same winning formula of our unique value proposition, including our industry-leading network, to UScellular customers while further augmenting our network for our customers."

The synergy updates include a revised total annual run rate cost synergy expectation of approximately $1.2 billion, a 20% increase from the original guidance of approximately $1.0 billion. This revised synergy target is comprised of approximately $950 million in operational expenses (opex) and approximately $250 million in capital expenditures (capex).

The integration of UScellular's operations is now expected to be achieved in approximately two years, an acceleration from the original three-to-four-year expectation. The costs to achieve this integration are expected to be approximately $2.6 billion, within the original guidance range. T-Mobile plans to reinvest a portion of the synergies toward enhancing consumer choice, quality, and competition in the wireless industry.

In terms of customer updates, T-Mobile expects the stronger core business performance post-acquisition to offset the impacts of the initially higher-churning UScellular base. The overall postpaid and postpaid phone customer guidance for the year remains unchanged.

For Q3 2025, T-Mobile expects the following financial impacts from the UScellular acquisition:
- Service revenues of approximately $400 million
- Core Adjusted EBITDA of approximately $125 million
- Approximately $100 million in costs to achieve the integration, which are excluded from Core Adjusted EBITDA
- Approximately $175 million in depreciation and amortization expenses

The acquisition of the lower postpaid average revenue per account (ARPA) UScellular base, along with postpaid accounts acquired from the Metronet joint venture, will impact consolidated T-Mobile Postpaid ARPA by approximately $1.50 in Q3. These acquired customers represent an opportunity to apply the company's proven ARPA expansion playbook as part of the integration.

Excluding UScellular and Metronet, T-Mobile's underlying business continues to see strong Postpaid ARPA growth, with ongoing expectations for full year 2025 versus 2024 growth of at least 3.5%.

In addition to the UScellular acquisition, T-Mobile is also accelerating its digital transformation efforts. In Q3 2025, the company expects to recognize approximately $350 million in predominantly non-cash costs associated with its digital technology transformation. This includes non-cash impairment expenses and accelerated depreciation related to the retirement of software as part of its shift to a more streamlined and dynamic billing technology stack.

T-Mobile also expects its recent acquisitions outside of UScellular, alongside ongoing network investments, to generate an additional $120 million in depreciation, amortization, integration, and other expenses in Q3.

The company's forward-looking statements are subject to several risks and uncertainties, including adverse economic, political, or market conditions, negative effects of the acquisition on the market price of T-Mobile's common stock and on T-Mobile's operating results, costs or difficulties related to the integration of UScellular's operations, and other risks detailed in T-Mobile's filings with the SEC.

References:
[1] https://www.morningstar.com/news/business-wire/20250904333578/t-mobile-increasing-and-accelerating-long-term-synergy-expectations-following-close-of-uscellular-provides-business-update
[2] https://www.nasdaq.com/press-release/t-mobile-increasing-and-accelerating-long-term-synergy-expectations-following-close