AT&T Wireless to join the 3G fray?

AT&T Wireless, rumored to be launching its next generation cell phone network, has scheduled a briefing on Tuesday about what it now describes only as an "innovative new wireless service offer".

Japanese cell phone service provider NTT DoCoMO, a part-owner of AT&T Wireless; Hewlett-Packard; Microsoft and RealNetworks are expected to attend the midmorning news conference.

Various reports suggest AT&T Wireless will announce it has begun selling wireless broadband, which bodes well for its proposed $41bn sale to Cingular Wireless. An AT&T Wireless spokesman had no comment on Monday.

The carrier is expected to launch the service in Detroit, Phoenix, San Francisco and Seattle. It will let subscribers transfer data at 200kbps to 300kbps.

The upgrade would satisfy an agreement AT&T Wireless has with NTT DoCoMo, which owns a 16 per cent stake in the carrier. AT&T Wireless' choice was either to launch a 3G network in four cities by year's end or pay a significant amount of money to NTT DoCoMo.

By escaping the threat of a payment that could have been in the billions of dollars, AT&T Wireless is erasing a possible roadblock of its proposed sale to Cingular Wireless. The sale is expected to close by year's end.

Half of the top six US cell phone service providers have now launched 3G, or third-generation, cell phone networks, which create Net access that carriers assert can compete with the wired variety. These networks also add desperately needed voice-calling capacity to wireless carriers' overtaxed networks.

Verizon Wireless' next-generation cell phone network currently operates in San Diego and Washington, D.C. But the reigning North American wireless speed king undoubtedly remains Nextel Communications, which sells wireless broadband using equipment considered a generation ahead of what Verizon Wireless and AT&T Wireless use.

Sprint will likely be the next major cell phone service provider to make the push to 3G, having sunk $1bn into building a network set to launch later this year.

It remains to be seen how the AT&T Wireless service will measure up to the competition and whether the company will ever get a chance to extend service beyond its current markets.

Still, AT&T Wireless may be the cheapest of the 3G networks in the United States, priced at $25 per month for unlimited access. It's rumored that the carrier is also offering a higher-quality business-class service for $80 a month, which is what Verizon Wireless charges for unlimited access.

Ben Charny writes for CNET News.com