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U.S. Cellular to upgrade wireless network

Nortel Networks will supply the wireless carrier with most of the equipment needed to build a $400 million next-generation network.

Nortel Networks will supply wireless carrier U.S. Cellular with most of the equipment needed to build a $400 million next-generation wireless telephone network, the companies said Thursday.

About 85 percent of the equipment will be from Nortel, with the balance coming from Nortel rival Lucent Technologies, according to industry sources. Construction of the new network will begin in the third quarter of this year, according to a U.S. Cellular representative.

Hichem Garnaoui, U.S. Cellular vice president of national network operations, said the company's new telephone network will use equipment based on a telephone standard with the name of CDMA20001xrtt, which uses Qualcomm's CDMA (code division multiple access) telephone standard.

The deal unveiled Thursday is another blow to a telephone standard called TDMA (time division multiple access), which carriers like AT&T Wireless, Cingular Wireless and U.S. Cellular used to build their first cellular telephone networks. But now these three carriers are building new networks and all three have chosen to use a different type of cell phone equipment. Nearly two-thirds of U.S. Cellular's current network uses TDMA.

Garnaoui said it's a logical choice to move away from TDMA. Newer telephone equipment based on standards like CDMA20001xrtt can handle more simultaneous calls than TDMA gear, making it a cheaper way to upgrade to a bigger telephone network, he said.

"TDMA just didn't make financial sense," he said. "TDMA will go away. It's practically a dead technology."

Garnaoui said the company plans to stop selling TDMA handsets when it launches its new wireless network using the Nortel and Lucent equipment, he said. TDMA handsets will still be able to use the network, however. The hope is the existing customers will upgrade to new handsets and TDMA users will eventually disappear, he said.

U.S. Cellular is the nation's eighth largest wireless carrier. It has about 3.4 million customers in mostly small and medium-sized cities. It is among the dozens of telephone companies worldwide trying to build new networks in order to keep up with the growing number of people using cell phones.

The new telephone networks, regardless of what type of equipment they use, are supposed to at least double the number of cell phone calls that can get through at any time. Carriers are also adding wireless Internet capabilities to their networks, hoping to make more money selling services like wireless messaging or music downloads.