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T-Mobile outlines plans for 3G network

Cell phone carrier to spend $2.66 billion to upgrade to a next-generation network using newly acquired spectrum.

T-Mobile USA, the fourth largest cell phone provider in the U.S., said Friday it will spend roughly $2.66 billion over the next couple of years to deploy a 3G wireless network.

The company, owned by the German carrier Deutsche Telekom, will use the $4.2 billion worth of spectrum licenses it recently bought in the Federal Communications Commission's auction for the new network.

T-Mobile, the smallest of the major mobile-phone carriers in the U.S., is the last of the big carriers to deploy a 3G network. Cingular Wireless, Sprint Nextel and Verizon Wireless have each been offering 3G wireless service for more than a year. 3G allows carriers to offer more capacity on their networks to deliver new services such as video, music and other data services.

But T-Mobile executives say the company has not been hurt by the delay.

"We believe we have timed this well," Robert Dotson, president and CEO of T-Mobile USA, said during a conference call Friday to discuss the new network plans. "We have a track record of not putting our dollars in 'gee whiz' technology. We invest our dollars smartly and that has earned us financial returns in the market place."

He pointed out that T-Mobile's average revenue per unit is $50, a figure that compares favorably to its competitors. He added that the company has competed strongly for mobile-data users even though it doesn't have a 3G network. The company has roughly 1.5 million customers using converged devices such as the Sidekick, on its 2G and 2.5G networks, he said.

The spectrum licenses acquired through the FCC auction have allowed T-Mobile to double its capacity in the top 100 markets in the U.S., finally giving T-Mobile the spectrum it needs to compete with the other major U.S. carriers.

T-Mobile will start building the new network this quarter and it will begin offering service commercially starting in mid-2007. It plans to have most of the network completed by 2008, with the full network completed in 2009.