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AT&T is moving to shore up its wireless spectrum with a deal to acquire capacity from Verizon for $1.9 billion.
The deal comes days after AT&T announced it is buying Alltel’s U.S. retail wireless operations from Atlantic Tele-Network for $780 million. That deal also includes the acquisition of licenses for wireless airwaves. Alltel’s network covers about 4.6 million people in six states, including Georgia.
The spectrum from Verizon will allow AT&T to reach 42 million people in 18 states, the company said. In addition to cash, AT&T will give Verizon unneeded spectrum licenses in five markets, mainly in the West.
As the demand for mobile Internet services grows due to the surge in smartphone, tablet and other wireless device sales, companies are trying to stay ahead of the demand by boosting high-speed wireless capacity.
AT&T and Verizon are in a fierce battle for wireless customers despite Friday’s deal. AT&T reported Thursday that it added 1.4 million contract customers last year, but that compares with Verizon’s addition of 5 million such customers for the year. Contract customers are the most lucrative for the companies.
More spectrum means the delivery of services without disruption or bandwidth traffic jams, and AT&T probably will use the additional capacity to augment its 4G LTE deployment, according to CNET. T-Mobile USA and MetroPCS are merging to combine their spectrum for better service for both of their customer bases, CNET noted.