InformationWeek

Case in point: AT&T recently spent $3.3 billion for wireless systems in San Francisco, San Diego, and Houston that will give it 3.3 million customers. But AT&T doesn't plan to adopt faster wireless technologies, which support data speeds of 384 Kbps, until 2002. Its current technology, cellular digital packet data, runs at only 14.4 Kbps.

"It's a safe bet that operators will spend the bulk of their money on expanding the reach and capacity of their current networks before massive upgrades. There's intensifying competition for wireless customers, which means the top priority is to get these people on the network," says Lisa Pierce, a director at Giga Information Group. "That doesn't diminish the importance of testing high-speed technologies; it's just a case of first things first."

Although most wireless operators are reviewing technologies to support faster speeds, such as versions of Code Division Multiple Access and Enhanced Data for Global Evolution, few will say when those technologies will be deployed.

Why is it taking carriers so long to boost their networks to meet rising demand? The carriers say wireless data technologies are still emerging and need to be tested. Plus, the equipment is expensive and installation is both costly and time-consuming.

"Nationwide coverage is a misnomer, as operators need far more cell sites to expand their networks, keep connections up, and improve their quality," says Maralyn Rosenblatt, VP of Internet technologies at Countrywide Home Loans Inc. in Calabasas, Calif. "And the combination of incomplete coverage and low data speeds has to be acting as an impediment to rolling out wireless applications and services--14.4 Kbps isn't cutting it throughput-wise."