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(Reuters) –
T-Mobile USA plans to start doubling the speed of its high-speed
wireless data network this year to 42 megabits per second, joining a
race toward higher-speed networks to make its service competitive with
Verizon Wireless’.

T-Mobile USA, a unit of
Deutsche Telekom, also told reporters at the Consumer Electronics Show
it would not charge a premium fee for its highest-speed wireless
service, directing a thinly veiled dig at bigger rival Sprint Nextel,
which charges extra for its advanced service.

Its
bigger rivals Verizon Wireless and AT&T Inc also chose CES to
showcase their fastest networks and unveil gadgets intended to take
advantage of blazing Web speeds.

The
No. 4 U.S. mobile service is looking to get more out of its existing
network technology because it would need new wireless airwaves to go to
new technology known as LTE, which its rivals are investing in.

Chief
Executive Philipp Humm said the company has plenty of wireless airwaves
to support its services for the next two to three years, but is
currently looking at multiple options for ways to expand its spectrum
holdings and go beyond this.

"The
most important thing is for us medium-term will be to have additional
spectrum," Humm told Reuters on the sidelines of the event.

Options
could be to buy spectrum in a government auction or from smaller
provider Clearwire Corp. T-Mobile USA is also looking at the potential
for a partnership where it could use the Clearwire network or one being
planned by a new company Lightsquared.

But
Clearwire needs more funding to expand its network while Lightsquared,
which also needs new funding has yet to build its network.

In
the meantime, T-Mobile USA said the speed upgrade announced Thursday
will be a relatively cheap software upgrade but would allow it to
compete head-to-head with Verizon Wireless, a venture of Verizon
Communications and Vodafone Group Plc.

"With 42 and LTE, there’s very little difference," T-Mobile USA Chief Technology Officer Neville Ray said.

T-Mobile
USA currently offers services of 21 megabits per second in markets with
200 million people. It expects to be able to upgrade two thirds of its
current market footprint to 42 megabits per second this year.

It
sees customers opting for higher-speed networks in order to use
applications such as video conferencing or multi-player gaming.

(Reporting by Sinead Carew; editing by John Wallace, Bernard Orr)