T-Mobile US is set to buy spectrum licenses from Verizon Wireless to improve its high-speed wireless services in a deal worth $3.3 billion.

T-Mobile, majority owned by Deutsche Telekom, said the deal includes $2.365 billion in cash and a transfer of spectrum worth $950m.

It had been raising money to buy more airwaves as it beefs up its network to catch up with rival services.

Reuters reported in November that T-Mobile was seeking to buy the spectrum from Verizon Wireless, owned by Verizon Communications and Vodafone Group.

T-Mobile, the fourth largest US mobile provider, said the licenses cover more than 150 million people in areas such as New York, Atlanta and Los Angeles. It expects to roll out services using the spectrum as early as the fourth quarter of 2014.

It said that the transaction, which requires regulatory approval, is expected to close around the middle of this year.

T-Mobile had raised $1.8 billion through a sale of its common stock in November and sold about $2 billion in bonds to fund future spectrum purchases.

Analysts said the spectrum would boost T-Mobiles network capacity and coverage, but estimated that it could cost another $1 billion to add spectrum to its network.

T-Mobile also said the companies will realign spectrum blocks in markets such as northern California and Atlanta.