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Sprint begins $3 billion march to 3G

Cellular provider inks deals with Lucent, Nortel and Motorola. It also plans high-speed Internet service for the new year.

Sprint, the fourth-largest U.S. cell phone operator, has started a $3 billion network upgrade, with $1 billion earmarked for a wireless broadband service to launch soon in selected cities, a Sprint executive said Tuesday.

The operator turned to longtime equipment suppliers Nortel Networks, Lucent Technologies and Motorola for the base stations and other equipment it'll be installing over the next three years. Sprint awarded equipment supply contracts Tuesday totaling $1.5 billion to Lucent Technologies, $1 billion to Nortel Networks and $450 million to Motorola.

Sprint Vice President Bob Azzi said the operator intends to make good on the promise it made months ago to launch a high-speed Internet service in select cities by Jan. 1 and in a majority of the nation's top markets by the end of next year.

Sprint's efforts over the next three years typify the new attention every major U.S. carrier is putting on network quality and future services. With more than half of the U.S. public carrying cell phones, operators are having a harder time finding new customers to lure into the market. So they have shifted their focus to keeping existing customers with cut-throat deals on phones and airtime, building stronger networks and selling new services, like high-speed Internet.

Verizon Wireless believes that it's ahead in the upgrade game of all other U.S. operators, particularly when it comes to offering wireless broadband. Verizon Wireless, whose BroadbandAccess is now available in 20 cities, is by far the largest deployer of what known as third-generation (3G) cell phone equipment in the United States. The knocks against wireless broadband include its price--about $80 a month for unlimited use--and its speed, equal to a slow wired Internet connection.

Verizon Wireless and Cingular Wireless are among those recently pledging billion-dollar budgets for capital improvements to their networks. Sprint's Azzi said his company is putting up the money it takes to stay in the game.

"This gives us a good start," he said. "It positions us to take the next step."