(Reuters) -AT&T ( T ) said on Tuesday it has agreed to purchase certain wireless spectrum licenses from EchoStar ( SATS ) for about $23 billion, as the U.S. telecom giant scales its network to stay ahead in a competitive market.

Shares of satellite communications firm EchoStar ( SATS ) jumped more than 40% in premarket trading, while AT&T ( T ) rose 1.5%.

The deal advances AT&T's ( T ) investment plans to accelerate its fiber and 5G network build-out as the wireless market saturates and internet usage surges.

The licenses cover more than 400 markets across the U.S. in total and will strengthen AT&T's ( T ) low-band and mid-band spectrum holdings, the company said.

The companies also agreed on Tuesday to expand their network services agreement, enabling EchoStar ( SATS ) to operate as a hybrid mobile network operator (MNO) providing wireless service under the Boost Mobile brand. AT&T ( T ) will be the primary network partner. 

AT&T ( T ) also reiterated its 2025 financial guidance and said it intends to finance the spectrum purchase with cash on hand and incremental borrowings.

In May, the wireless carrier clinched a deal to acquire Lumen Technologies' consumer fiber operations for $5.75 billion in cash.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Devika Syamnath)