Level 3 Communications said it will buy broadband services provider Global Crossing for $1.9 billion plus $1.1 billion in debt assumption. The aim is to create a global broadband network across three continents and reduce overall expenses.

The deal brings a much-needed consolidation to the broadband market, where the potential for traffic growth is huge but the major players have been hurt by low prices.

Broomfield, Colo.-based Level 3 agreed to buy Global Crossing in an all-stock transaction, paying $23.04 a share based on Global Crossing’s closing stock price on April 8. The full value of the deal is $3 billion, since Level 3 will assume Global Crossing’s debt of $1.1 billion.

The combined revenue of both companies is about $6.26 billion, based on last year’s revenues. Overall, the company hopes to cut annual capital spending by $40 million. The deal could reduce a crowded field in the broadband services market and help stabilize prices. Overall, the combined companies will serve more than 50 countries and provide connections to 70.

Gigaom says the deal will give Level 3 more clout to negotiate with bigger telecommunications players, such as Comcast, even as network ownership consolidates into the hands of fewer players.

Both companies are losing money. Level 3 lost $622 million last year and has been unprofitable since 1998. Global Crossing lost $172 million in 2010 and last turned an annual profit in 2003.