US Cellular pressured to sell to larger carrier
updated 12:20 pm EDT, Fri March 13, 2009
US Cellular may Sell Self
US Cellular's owner TDS is being pushed to sell the company to a major carrier, multiple sources have said to Reuters. Shareholder groups like Gamco Investors and Southeastern Asset Management are both claimed to be pressuring TDS to open itself to deals in the face of crumbling market share and a likely inability to upgrade its network beyond its current 3G speeds. The two financiers combined hold nearly 30 percent of TDS' stock and so may lead a proxy war to force management to strike a deal.
The company publicly denies the claims and says it plans to move quickly to 4G through the Long Term Evolution (LTE) standard, like larger carrier Verizon, as it has the resources to make these upgrades and remain competitive. "We've got $800 million in cash and cash equivalents, we're not being pressed financially," TDS spokesman Mark Steinkrauss maintains.
Any such takeover would accelerate already rapid consolidation in the US cellphone market and likely give major carriers coverage in areas that were previously difficult to service. US Cellular is the largest regional carrier in its namesake country but is now increasingly outsized by fellow CDMA carriers like Verizon, which formally bought out Alltel at the start of this year and GSM carriers like AT&T, which bought regional provider Centennial.
Customers have lately been defecting away from US Cellular in part because of its phone selection, which regularly trails behind larger carriers. It only just got a rough iPhone equivalent in the Samsung Delve by late 2008.
Fresh-Faced Recruit
Joined: Jun 2007
Smaller is better
I like smaller regional carriers because they actually seem to CARE about their customers and support, especially in smaller markets.
My carrier has tech support staff that is actually in my state, and they know the names of the rural towns I travel through and can take care of issues that may arise. A national carrier could care less if there is good coverage in a town of 500 people. It's just not worth it to them.