As previously reported, Deutsche Telekom announced Friday at a press conference in New York that it would begin transitioning the T-Mobile USA network to UMTS this quarter, with work continuing through 2009. The network upgrade is expected to cost the company some $2.7 billion, and service should begin in mid-2007.

The cost is expected to be offset, however, by a decrease in spending in the current network as the company transitions, T-Mobile executives said at the press conference.

Not specified were the services the nation's fourth largest cellular carrier planned to offer, nor areas where it would be initially offered. Even without specifics, the company did say that 50 percent of the UMTS rollout in New York had already been completed.

T-Mobile's 3G network would be complemented by a UMA technology rollout, which permits calls to be made over a Wi-Fi network. However, initially the service would be available in limited trials, T-Mobile chief Robert Dotson said at the event.

Once regularly rumored to be on the chopping block, T-Mobile USA has now become an important piece of parent company Deutsche Telekom, and now contributes nearly quarter of the company's annual revenue. The carrier is an integral part of the "Telekom 2010" initiative, aimed at revitalizing the company.

Under DT's plans, market share in the U.S. communications business would be maximized, with investments in TMUS to make it the single largest company within the group. The company currently counts some 23.3 million customers.

"The auction and the resulting acquisition of additional spectrum here in the USA is an important step forward for us," CEO Kai-Uwe Ricke said. "Not just for T-Mobile USA but for the Deutsche Telekom Group as a whole, which benefits from the growth of its U.S. business."

T-Mobile's decisive win in the recent FCC wireless frequency auction doubled the amount of available spectrum in the top 100 markets, which will allow it to expand voice and data services, and better handle increased customer load.

The company has also made other significant changes in the past week, including the exit of celebrity spokeperson Catherine Zeta-Jones, a new service permitting unlimited calls to any five numbers of the consumer's choice, and a new slogan: "stick together."