Hot off the $41 billion deal to purchase rival AT&T Wireless, Cingular Wireless (owned jointly by SBC Communications (NYSE:SBC) and BellSouth (NYSE:BLS)) got in the holiday spirit and shelled out some serious greenbacks for equipment purchases yesterday to take its network to the next level.
The nation's largest wireless service provider committed to billions of dollars in equipment purchases from the likes of Lucent Technologies (NYSE:LU), Siemens (NYSE:SI), and Ericsson (NASDAQ:ERICY). Industry analysts estimate that it will add about $4 billion to equipment makers' coffers over the next several years.
The mega-carrier also cut deals with handset makers Nokia (NYSE:NOK), Motorola (NYSE:MOT), and LG Electronics to supply the cool new handsets that can access the new, third generation (3G) network that Cingular plans to have deployed in most major markets by the end of 2006.
The big move was largely expected because the new No. 1 wireless carrier needs to upgrade data speeds on its network to keep up with rival Verizon Wireless. Verizon (and soon SprintPCS) offers broadband wireless data service in several major markets, giving mobile customers data speeds that average 300kbps to 500kbps.
The new Cingular network is touted to eclipse these speeds slightly, offering 400kbps to 700kbps -- as fast as many DSL connections. Cingular will take advantage of newly developed 3G technologies complete with tongue-twisting acronyms like UMTS and HSDPA to provide rich multimedia experiences.
In its early stages, these fast, wireless data networks will be used primarily by laptop and PDA users who want access to the Internet and business networks over a wide area. But by the end of 2005, Americans should have the option of at least a few handsets that are high-speed data capable. This will facilitate more media-rich applications, such as video streaming and MP3 downloads right to your handset.
More competition for Verizon Wireless' broadband wireless service should also help speed a drop in costs (the service currently runs $80 a month). As with the precipitous drop in costs for DSL and cable broadband in recent years, users may soon be looking at several fully mobile broadband options in the $50 range.
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Fool contributor Dave Mock has already mailed his list to Santa, but wants a do-over now that he's seen a few new promotions. He owns no shares of companies mentioned here.
