Top U.S. carriers plot faster gadgets, services

NEW YORK Mon May 17, 2010 10:18am EDT

President and CEO of AT&T Operations John Stankey responds to a question from a Reuters reporter during a Reuters Global Technology Summit in New York May 14, 2010. REUTERS/Jessica Rinaldi

President and CEO of AT&T Operations John Stankey responds to a question from a Reuters reporter during a Reuters Global Technology Summit in New York May 14, 2010.

Credit: Reuters/Jessica Rinaldi

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NEW YORK (Reuters) - The next generation of high-speed Internet services, tablets, smartphones and other mobile gadgets could arrive faster than you would expect.

The two biggest U.S. phone companies, AT&T Inc and Verizon Wireless, are stepping up plans to speed up their networks and deliver advanced devices to consumers as early as this holiday season with partners such as Motorola Inc, Samsung Electronics and LG Electronics.

AT&T said it is planning to triple speeds for home Internet services, and double speeds on its wireless network, while Verizon Wireless said it will be ready with a slew of high-speed phones earlier than it had previously suggested.

"We still have a tremendous amount of opportunity in wireless," John Stankey, AT&T's operations chief said, dismissing suggestions from some telecoms analysts that the industry's exponential growth days were over.

"We're at the front of that 10-year (growth) cycle in the mobile space today," he said at the Reuters Global Technology Summit in New York on Friday.

While wireless carriers have to depend on data services for growth, because most people already have cellphones, Stankey sees opportunities in business applications. As industries add wireless connections to their equipment, such as medical devices and security systems, each business vertical could eventually generate a $1 billion a year in revenue, he said.

Stankey announced at the summit that AT&T would be able to double the speeds of its wireless data services in markets covering more than 250 million people in the fourth quarter, using technology known as HSPA Plus.

The upgrade would require an incremental investment of a few million dollars, a "rounding error" compared AT&T's total capital spend of up to $19 billion for 2010, he said.

AT&T also plans a residential broadband trial in June to allow Web surfing at speeds of 80 megabits per second (mbps), well above its current limit of 24 mbps and surpassing the 50 mbps service offered by Verizon Communications Inc.

If the tests are successful, commercial services could launch early next year, Stankey said.

LTE PHONES, ANDROID TABLETS

Meanwhile, Verizon Wireless is building its high-speed network based on Long Term Evolution (LTE) technology.

The company, owned by Verizon Communications and Vodafone Group Plc, is on track to offer LTE to a potential customer base of 100 million people in 25 to 30 markets including New York City, by year's end, according to Verizon Wireless CEO Lowell McAdam.

McAdam also outlined plans for multiple new devices starting with a selection of tablets to compete with Apple Inc's iPad. He plans to sell most of these gadgets, which run on Google Inc's Android software, in the fourth quarter.

"There's no reason we couldn't have an iPad," McAdam said, but added that the first tablets will be Android devices from contenders including Motorola, Samsung and LG.

Verizon Wireless is also planning to sell up to five LTE handsets by next May, which is faster than some analysts had expected. McAdam said Motorola, HTC Corp, LG and Research In Motion could be front-runners.

Verizon already sells HTC's Droid Incredible smartphone, which is seeing stronger-than-expected sales. McAdam said a shortage of advanced screens made by Samsung is hurting the company's ability to keep up with that strong demand.

In addition to phones, U.S. wireless carriers are also pushing new technologies for computing on the go.

AT&T's HSPA Plus upgrade will first be aimed at laptop users, giving them double the download speed for watching videos and other bandwidth-heavy applications.

Stankey said it was not clear when HSPA Plus-compatible phones would arrive or whether vendors would instead focus on the rival LTE technology.

He said AT&T was spending as fast as it could to beef up its network, which has been strained by a high number of users of the bandwidth-hogging iPhone.

Stankey said markets like New York and San Francisco, where the network came under most pressure, should perform as well as the rest of the country by the end of summer.

(Additional reporting by Jim Finkle, Paul Thomasch, Yinka Adegoke, Ritsuko Ando, Bill Rigby and Franklin Paul; Editing by Tiffany Wu and Richard Chang)

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