July 20, 2005 11:11 AM PDT

3G wars heat up

Cingular Wireless, the No. 1 cell phone operator in the United States, said Wednesday that it will have wireless broadband networks up and running in 15 to 20 cities by year's end as it tries to catch rival Verizon Wireless.

Cingular's commitment to have high-speed Internet available to 40 million Americans by January 2006 pressures No. 2 operator Verizon and No. 3 operator Sprint, which are rolling out similar networks in order to support new revenue-generating services such as video-on-demand.

Though they were relatively slow to catch on, wireless data services are finally being embraced in the United States--a promising sign given that each operator is spending billions of dollars to build faster networks.

Sales of cell phone ring tones (which replace a phone's prepackaged ring), game downloads, short text-only messages and photo messages generate more than $1 billion a year in revenue for Verizon. Meanwhile, according to data it released Wednesday, Cingular attracted $1 billion in revenues from the sale of such wireless services in the first six months of 2005.

Verizon Wireless leads the race in what's known as 3G--or third-generation--cell phone networks, which are expected to challenge traditional broadband services offered by cable and landline phone operators. Verizon's BroadbandAccess is available now in 53 markets--accounting for about one-third of the U.S. population--and will cover half the U.S. population by year's end, according to company spokesman Jeff Nelson. Cingular and Sprint, by comparison, are literally just getting started.

"These are full markets, not 'dense urban business corridors,'" Nelson wrote in an e-mail to CNET News.com on Wednesday.

Cingular's 3G network right now is available in only a handful of cities, most of them set up by AT&T Wireless, which Cingular purchased last year. But the operator has completed test calls in nine other areas where product launches are imminent, according to Chief Financial Officer Ralph De La Vega.

Sprint says it will offer wireless broadband in 14 metropolitan areas by the third quarter, making the service available to 92 million people. By the fourth quarter, Sprint said, the service will be expanded to more cities and available to 143 million people. No. 4 operator T-Mobile USA intends to introduce a next-generation network in 2007.

 

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