Pushing to expand its network capacity, U.S. cellphone service giant Verizon Wireless agreed to pay $418 million to buy the wireless assets of Qwest ( Q).

Verizon Wireless, a joint venture of New York telco Verizon ( VZ) and British wireless giant Vodafone ( VOD), said the deal covers spectrum licenses in 62 markets in 14 Western and Midwestern states, covering a population of 30.8 million people.

The transaction also includes Qwest Wireless' network-switching centers, cell sites and related network equipment, which operate on the code division multiple access, or CDMA, standard that Verizon Wireless uses.

The definitive agreement doesn't include Qwest Wireless' subscriber base. Denver-based Qwest said it will continue to offer wireless service under the Qwest brand to residential and business customers through its wholesale relationship with Sprint PCS.

"The sale completes our shift from a network-centric wireless provider to a more customer-focused operation that is designed to deliver exceptional value and service to customers," said Qwest financial chief Oren G. Shaffer. "The monetization of the network assets further improves our liquidity."

The transaction is expected to close in the fourth quarter of this year or early 2005.

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