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Verizon Wireless to speed up Internet service

Posted on: Sunday, 11 January 2004, 06:00 CST

NEW YORK - Two months after AT&T Wireless launched the nation's fastest wireless Internet service, Verizon Wireless says it will spend $1 billion to reclaim the lead with an even speedier technology that just months ago the company insisted was not an urgent need.

The next-generation technology being used by Verizon, which can provide wireless downloads to a laptop between five and 10 times quicker than a dial-up connection over a wired telephone, will be rolled out nationally over the course of two years, with some cities getting the service by this summer.

In tandem with Thursday's wireless announcement, parent company Verizon Communications announced a $2 billion investment to accelerate the upgrade of its traditional wireline telephone network with Internet Protocol technology. The decision comes amid a scramble by top rivals to offer services using so-called "Voice over IP," or VoIP, a cost-cutting technology that converts the sound of phone conversations into digital packets just like e-mail and computer data.

Verizon also announced plans to launch products this year that integrate a person's assorted communication devices, enabling customers to centrally manage phone calls, voice mails, calendars, address books and e-mails.

Verizon Wireless, which is also part owned by Britain's Vodafone PLC, introduced a speedier cellular data service during September in two test markets, Washington and San Diego, but asserted that a wider rollout was not planned or necessary anytime soon.

That strategy may have changed with November's national launch by AT&T Wireless of a mobile network that enables laptop connections up to twice as fast as the cellular-based Internet access currently offered across most of the country by Verizon, Sprint PCS and Cingular Wireless.

Sprint, which uses the same wireless standard as Verizon, stood firm Thursday in its decision not to upgrade with the "EV-DO" version of the technology that Verizon has now decided to deploy nationally.

Because the technology doesn't improve call capacity and quality, "Sprint considers it to be an inefficient use of the spectrum when voice is still the primary and dominant driver of traffic on our wireless network," spokesman Charles Fleckenstein said. "Based on our current projections regarding wireless data market growth, Sprint is instead focused on the next release of technology beyond EV-DO," which the company expects to deploy in 2006.

AT&T Wireless, which spent $300 million to introduce its "EDGE" service in the fall, is already testing a more advanced technology called UMTS. The company expects to offer UMTS, which can provide comparable speeds to the service Verizon plans to roll out, in four cities including Seattle and San Francisco by the end of 2004.

For now, there's no plan to accelerate that rollout in response to the announcement by Verizon Wireless, said Ritch Blasi, spokesman for AT&T Wireless.

The arms race in mobile data comes as cellular companies grapple with new federal rules that took effect in late November allowing customers to switch services without losing their phone numbers.

The improved wireless data services are most appealing to valuable business users. Notably, the faster laptop connections offered by AT&T Wireless and Verizon Wireless are priced at $80 per month for unlimited usage.

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