AT&T to Buy Spectrum From Arch Rival

AT&T (NYSE T), one of the nation's wireless company, announced plans Friday to purchase 700 megahertz B Band wireless spectrum for $1.9 billion in cash from its rival Verizon VZ. The move is part of a larger strategic initiative of the company to improve its 4G LTE coverage.

In the press release, the company noted that, "This acquisition complements AT&T's existing holdings in the 700 MHz B band and will allow AT&T to continue to deploy 4G LTE services to meet demand for mobile Internet services on a wide array of smartphones, tablets and other devices. The company announced in November 2012 that it plans to reach 300 million people in the U.S. with its 4G LTE network by the end of 2014."

The new spectrum and licenses cover 42 million customers across 18 states including California, New York, and Virginia. The transaction is still subject to regulatory approval and is expected to close in the second half of 2013.

AT&T shares rose on the news and also following the company's earnings release where the company reported earnings ex-items that narrowly missed consensus estimates while revenue topped estimates. As of writing, shares rose 0.39 percent to $33.88 per share after opening at $34.12 and rising as high as $34.24 per share.

Verizon shares declined 0.52 percent to $42.37 per share, near the session's lows, as the company now lacks spectrum in key markets.

As mentioned, the move comes as AT&T looks to improve its 4G LTE coverage in key markets. The move adds another 42 million customers to its coverage, placing the company well on its way to achieving its goal of total coverage for 4G LTE of 300 million people by 2014. The deal now must be reviewed by regulators at the FTC before being finalized.