AT&T Wireless is reeling in its original 3G deployment plans in a move that will result in slower technology upgrades and a more watchful eye from one of its key investors.

The wireless carrier recently revealed that it only will have full 3G support in four markets - San Francisco, San Diego, Seattle and Dallas - by the end of 2004. The company's original plan was to have full 3G support in 13 markets by June 2004.

While AT&T Wireless is slowing its 3G support, the time frame is not expected to make a big difference to customers, says Rodger Entner, analyst at The Yankee Group. Many users are just getting into wireless mobile data services and these same users are not clamoring for higher speeds, he says.

"A lot of carriers are now hesitant because the true business case for 3G hasn't been made yet," Entner says.

Under the new plan, AT&T Wireless might switch to several alternative markets if the carrier has deployment issues in Dallas or San Diego.

Full 3G support for AT&T Wireless means upgrading its network to Wideband Code Division Multiple Access (WCDMA) technology, also called Universal Mobile Telecommunications System.

The International Telecommunication Union says that 3G wireless networks support mobile data rates of up to 128K bit/sec, stationary data rates of 384K bit/sec and fixed data rates of 2M bit/sec.

AT&T Wireless altered its plans primarily for two reasons: lack of market demand for full 3G and the move toward more conservative network investments.

"We looked at the current industry environment and decided it was smarter for us to slow down deployment," says Rod Nelson, CTO at AT&T Wireless. "What we expected for market take-up for faster data has turned out to be somewhat unrealistic. Expectations around a lot of things in technology were unrealistic. . . . The market is developing nicely, but not as fast as we projected."

AT&T Wireless also is "waiting to see how 2.5G, [General Packet Radio Service (GPRS)] continues to do in the market in 2003," says Scott Ellison, an analyst at IDC.

AT&T Wireless can meet its customer's needs with GPRS and Enhanced Data Rates for Global Evolution (EDGE), which is coming next year, Nelson says. "We don't need to imprudently rush to next-generation technology," he says.