Verizon's Uphill Data Push

But despite the challenges, Verizon Wireless says EV-DO has been a hit in the early going.

The Bedminster, N.J.-based company declined to provide any updated numbers, but people familiar with the EV-DO effort say subscriber additions and city upgrades are running "ahead of target."

According to an investor presentation the company made in late January, the EV-DO network was then available to 75 million people, and EV-DO subscribers totaled 75,000.

One insider, who asked not to be identified, says the company is stepping up its commitment to the new offering and is accelerating the network buildout. This person says that under the new plan, Verizon Wireless will reach by midyear its 2005-end goal of having the EV-DO network available to 150 million people.

Verizon Wireless hopes its lead in third-generation, or 3G, data offerings will give it an early advantage as rivals like Cingular -- a joint venture of SBC Communications (SBC Quote) and BellSouth (BLS Quote) -- and Sprint get ready to offer competing wireless broadband services.

For Lucent Technologies (LU Quote) and Nortel Networks (NT Quote) investors, Verizon Wireless' rush to market is reassuring news. The two EV-DO gearmakers are suppliers to Verizon Wireless, which has been a bright spot in an otherwise bleak list of telco customers busy with consolidation and rethinking expansion plans.

Verizon Wireless, which is the No. 2 cell-phone service in the U.S., is largely consumer-oriented and weak in the lucrative business-user segment. Part of the EV-DO strategy is to attract more business customers with the fast data offering, and perhaps gain a foothold on the larger wireless corporate calling market.

Continued wireless expansion is important to Verizon, which is vying with rival Qwest Communications(Q Quote) to take over long-distance business services giant MCI (MCIP Quote). That struggle has highlighted the slow-growth shortcomings of both Verizon and Qwest.