Apparently giving up on its own content delivery network (CDN), AT&T Inc. (NYSE: T) Thursday announced a deal to put Akamai Technologies Inc. (Nasdaq: AKAM) at the edges of its network.

The deployment will start in North America and will move internationally after about 12 months. AT&T's own CDN, which was announced last year, will be merged into the Akamai deployment in 2013, the companies said.

Financial terms weren't disclosed.

Why this matters
Carriers need CDNs; at least, that's the current thinking. But in AT&T's case, maintaining its own CDN -- using technology licensed from EdgeCast Networks Inc. and Cotendo Inc. -- was apparently not worth the effort.

As for why carriers need CDNs -- it's all the video content they're being asked to shunt around. Putting up a CDN means spending less money on routers and other equipment in the middle of the network.

Verizon Communications Inc. (NYSE: VZ), meanwhile, is pursuing something a little more ambitious. Its Digital Media Services (DMS), launched early in 2011, is like a CDN that adds transcoding and formatting for different devices. Verizon's aim was to offer DMS to other carriers, including cable providers.

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— Craig Matsumoto, Managing Editor, Light Reading