Nextlink Communications Inc., a telephone company with a growing nationwide network, said yesterday that it will acquire Concentric Network Corp. for $2.9 billion in stock, adding high-speed Internet access, World Wide Web hosting, e-commerce and other services to its offerings.

Nextlink, which is based in Bellevue, Wash., but has announced that it is moving to McLean this year, was founded in 1994 by cellular phone pioneer Craig McCaw. It connects customers in major markets--mostly small and medium-size businesses--to its networks using three different technologies: fiber optics, wireless high-speed broadband services and high-speed digital subscriber lines (DSL).

The acquisition of Concentric, which is based in San Jose, allows Nextlink to add popular data services to its local and long-distance telephone offerings. Frank Murphy, an industry analyst at First Union Securities, said Nextlink is "one of a growing number of competitive phone companies that are cropping up throughout the country." The acquisition fills a major hole in the company, "its lack of a growing, aggressive data strategy," he said.

"They've grown primarily through offering voice-based services," said Jonathan Atkin, an industry analyst with Ferris Baker Watts. "This really catapults them into the data-Internet arena."

Nextlink Chairman Dan Akerson said the transaction--which is intended to be tax-free to shareholders of both companies--will allow the combined company "to aggressively and successfully compete for the business of many of the nation's Fortune 1000 companies."

The acquisition will allow Concentric to use Nextlink's lines to provide services, rather than leasing lines as it does now. Akerson will be chairman and chief executive of the combined company. Concentric CEO Henry R. Nothhaft will be vice chairman and will lead the company's retail Internet and data services businesses.

Under the terms of the deal, Concentric shareholders will receive $45 worth of Nextlink stock--or 0.573 of a share of Nextlink based on Friday's closing price of $78.50--for each share they hold. The actual ratio of shares will depend on the average trading price of Nextlink stock in the 20 days before the deal closes, but the number cannot be less than 0.495 nor more than 0.650.

Nextlink provides service in 49 markets nationally to about 50,000 customers. Concentric had sales in 1999 of about $150 million and has about 100,000 customers. The combined company will benefit from cost-cutting synergies and the ability to cross-sell services to each other's customers, officials said yesterday.

Nextlink shares closed yesterday at $77.06 1/4, down $1.43 3/4. Concentric stock closed at $39.62 1/2, up $9.62 1/2.