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(Reuters) - Sprint Nextel Corp Chief Executive Dan Hesse said he plans to kick off a high-speed wireless service in five U.S. cities on July 15, a move that could be crucial in its efforts to compete with bigger rivals Verizon Wireless and AT&T Inc.
Sprint, the No. 3 U.S. mobile service, is upgrading its network with the same Long Term Evolution (LTE) high-speed technology its rivals are adopting, but is about a year-and-a-half behind Verizon Wireless and about 10 months behind AT&T.
Hesse said on Wednesday the service will start in Atlanta, Dallas, Houston, Kansas City and San Antonio, and that more market launches will be announced later in the year.
Sprint also said that by the end of 2013, it expects to have largely completed the build-out of its high-speed LTE nationwide network across the United States.
Hesse told reporters in Atlanta that savings from reduced customer service costs have helped fund the network investment. He said customer care costs at Sprint have fallen to $2 billion from almost $4 billion about four years ago.
"Good customer service costs less," Hesse said.
The service, which is expected to provide money-losing Sprint a roughly six-fold increase in data speeds, is part of a $7 billion project that includes upgrading one network and decommissioning another.
Sprint has also committed to buying $15.5 billion of iPhones from Apple Inc in the next few years.
Sprint has said it would launch LTE around mid-year, listing Atlanta, Baltimore, Dallas, Houston, Kansas City and San Antonio as the first cities to have its LTE service.
Sprint already sells multiple phones that support LTE in the hopes that customers would buy the devices in advance of the service launch.
One of those smartphones is the new Samsung Galaxy S III, which is seeing rampant demand. Hesse said supply shortages of that phone had delayed its availability in stores.
Sprint also said on Wednesday the Samsung Galaxy S III will be available in stores as of July 1. A 16GB version will be priced at $199.99 and 32GB version for $249.99 with a new line or eligible upgrade and two-year service agreement.
Sprint's shares have been hugely volatile since the company gave details of its upgrade plans in October last year. The stock closed unchanged at $3.13 on Wednesday.
No. 1 U.S. mobile provider Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc.
Reporting by Karen Jacobs and Sinead Carew; editing by Jeffrey Benkoe and Richard Chang