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Update 9:52 AM ET: A typo has been fixed in paragraph 6, changing a reference of megabits per second to kilobits per second.

An AT&T executive said Wednesday that the cell phone company will offer 20Mbps downloads over its wireless network as soon as next year. But don't get too excited; the real speed will likely be a lot slower.

Still, AT&T's network upgrade plan is expected to boost speeds significantly, which means that users of the hotly anticipated 3G iPhone, which is expected this summer, will be surfing the Web at lightning speeds compared with the slow 2.5G network they currently use.

It also means that AT&T's network, which is based on a GSM standard known as UMTS, or Universal Mobile Telecommunications System, will remain competitive with the new WiMax network currently being built jointly by Sprint Nextel and Clearwire.

"The two-year head-start that Sprint and Clearwire keep talking about is getting smaller and smaller every day," said Roger Entner, a senior vice president at IAG Research.

On Wednesday, Ralph de la Vega, AT&T's mobility chief, told investors at Morgan Stanley's annual Communications Conference that AT&T is currently upgrading its 3G wireless network to the newest and fastest version of the UMTS technology known as HSUPA, or High Speed Uplink Packet Access-enabled. This new technology will increase the speed of the network fivefold, he said. But exactly how fast the network will run is somewhat debatable.

Today, AT&T's 3G network, which uses the UMTS technology called HSDPA, or High Speed Data Packet Access, can theoretically deliver download speeds of about 3.6Mbps. But in the real world, speeds are closer to 400Kbps to 700Kbps. The new version of the network, which will use HSUPA, will have a theoretical speed of 20Mbps and actual download speeds of between 4Mbps and 6.6Mbps.

Because the actual speed of a network is dependent on several factors, such as how many users are on the network and how far apart the cell sites are spaced, Entner says he typically divides theoretical speeds by three in order to get a ballpark idea of how fast the network actually performs. But even that calculation is likely to be generous. Many experts say real networks typically run only 20 percent of the theoretical speed the technology used allows.

That said, AT&T's HSUPA network will likely provide download speeds that are competitive with speeds that the Sprint Nextel-Clearwire alliance plans to deliver with its new network, which uses a different technology, known as WiMax.

Theoretically, WiMax can deliver downloads between 40Mbps and 70Mbps. But Sprint has publicly stated that its customers will likely see speeds in the range of 2Mbps to 4Mbps, which are in line with expected speeds using HSPUA.

The best part of AT&T's strategy is that it can achieve these new speeds simply by upgrading software in its existing 3G infrastructure. 3G handsets, such as the anticipated new iPhone, will also be able to take advantage of the higher speeds simply by upgrading their software. Meanwhile, the new Clearwire still has to build its network and get WiMax-enabled devices in the hands of subscribers.

"AT&T is in a good position right now," Entner said. "It can ride the technological wave of HSDPA and HSUPA technology for a while and get increasingly faster speeds."

Indeed, other carriers using different technology, such as Verizon Wireless and Sprint Nextel, which have used a 3G technology known as EV-DO, or Evolution Data Optimized, will not have the same growth curve in their existing infrastructure.

EV-DO infrastructure can also be upgraded by combining wireless channels. But even doing that will likely produce only a theoretical maximum speed of about 14.4Mbps. That is one big reason that Sprint Nextel said it will build a 4G network using WiMax and why Verizon Wireless has said it will use newly won 700 Mhz spectrum to build a 4G network using a technology called LTE, or Long Term Evolution.

LTE offers a theoretical download speed of 100Mbps. And AT&T has said that when it exhausts its UMTS/HSDPA/HSUPA network, it will also build a new network using LTE.

AT&T says it has spent an additional $50 million in the months leading up to the iPhone launch to upgrade and add more capacity to its 2.5G EDGE network, but a company official said that subscribers shouldn't expect to surf the mobile Net any faster.

"We don't want to set unrealistic expectations," said Mark Siegel, a spokesman for AT&T. "We have been upgrading the network on an ongoing basis, and we've made an additional investment in anticipation of demand for the iPhone."

AT&T has spent over $16 billion since 2005 upgrading the EDGE network.

The iPhone has been criticized for the fact that it works on AT&T's 2.5G network instead of its faster 3G network. But in the last few days, some AT&T subscribers have been reporting noticeably faster data speeds using their 2.5G handsets. And there has been speculation that AT&T gave EDGE a "boost" in the days and weeks leading up to the launch, which happens Friday at 6 p.m. local time.

But AT&T's Siegel said that what customers are likely experiencing are bursts in speed.

"The connection speed depends on so many things," he said. "It depends on the site you're connecting to or the size of the file you're downloading. And sometimes users experience bursts that are above what is typical."

He said the company has not changed what it cites as the average data rates for the EDGE network. He said on average subscribers should expect between 100 kilobits per second and 130kbps.

But even if some users get bursts of faster speeds from time to time, the EDGE network is still much slower than a 3G network. AT&T's 3G network, which uses a technology called HSDPA (High-Speed Downlink Packet Access), gets average data rates of between 400kbps and 700kbps. Verizon Wireless and Sprint Nextel, which use a 3G technology called EV-DO (Evolution Data Optimized), also offer data rates between 400kbps and 700kbps.

So unfortunately, for all the soon-to-be iPhone users, AT&T hasn't magically increased the speed of its network. For truly faster speeds, iPhone fans will have to wait for the next-generation device that will work on a 3G network.