AT&T (T) announced its 3G network upgrade plans yesterday as the US telecom giant targets to increase network throughput across six US cities by the end of 2009. The company will launch 3G services in Charlotte, Chicago, Dallas, Houston, Los Angeles and Miami, which will enable theoretical download speeds of up to 7.2 megabits per second (Mbps). This will effectively double the existing downlink speed of 3.6 Mbps.

By upgrading its 3G network using the HSPA 7.2 technlogy, AT&T will offer practical average downlink speeds of 3 Mbps to 4 Mbps with peak speed may reach up to 5.5 Mbps. The company targets to deploy the HSPA 7.2 based network in 25 of the largest US cities by the end of 2010, with plans to cover roughly 90% of its 3G network footprint by 2011.

AT&T’s extensive nationwide 3G network has already covered around 350 U.S. cities and efforts are underway to add 20 new markets in 2009. To further increase throughput, the company is currently pursuing multiple technology upgrades including the deployment of the HSPA 7.2 technology based network. Moreover, the company is also preparing for field trials of Long-Term Evaluation (“LTE”), a 4G wireless technology with a theoretical peak downlink speed of 100 Mbps. The commercial launch is expected in 2011.

AT&T competes head-to-head with its archrival Verizon (VZ) in next-generation network advancements. The company’s initiative to deploy the HSPA 7.2 3G network is an initial response to Verizon’s aggressive roll-out plans of 4G LTE based network through 2010. Moreover, the other major rival Sprint Nextel (S) along with its partner Clearwire Corp (CLWR) is progressing well in the deployment of WiMax (a 4G mobile broadband technology) network.

The advancement to HSPA 7.2 will significantly benefit AT&T’s exisiting and upcoming high-end smartphones. Although, currently Apple’s (AAPL) iPhone 3GS will be the sole beneficiary of this upgrade, AT&T plans to launch six HSPA 7.2 compatible smartphones by the end of 2009.

The company has recently announced the availability of advanced multimedia messaging feature for its iPhone 3GS offering from September 25, 2009. The higher network speeds enabled by the HSPA 7.2 deployments will effectively address the increasing demand for higher bandwidth to support advanced data applications.

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