Like Telecom, the carrier is set to accelerate its mobile network form today’s peak download speed of 7Mbit/s. Better, hardware is on the way that can hack such bandwidth.

Today, Vodafone 3G, Telecom XT and (from next week) 2degrees’ networks all run on the same W-CDMA technology, and all have the same theoretical peak download speed of 7Mbit/s (in practise, you’ll achieve about half that, even under ideal conditions, and often a lot less if there’s congestion, or you’re far, or obstructed, from the nearest cell site).

But even as it launched XT, Telecom pledged to upgrade its new 3G network to support speeds of up to 21Mbit/s by Christmas (using HSPA+ technology, which gooses more speed from W-CDMA; today all three carriers use HSPA+). Head of retail Allan Gourdie told NBR that the cost of the upgrade is included in XT's original $574 million cap-ex.

Vodafone countered that it planned its own 21Mbit/s upgrade as soon as trials were finished. The carrier still hasn’t named a launch date. But in Auckland today it will demo a working connection; a proof-of-concept that surely indicates it’s set to upgrade ahead of Telecom.

Mobile testing is something of a black-art, due to the vagaries of cell tower placement, traffic loads and local backhaul, but in general NBR has found XT faster in more places. A 21Mbit/s upgrade could see Vodafone leap-frog back in front.

At least in some areas.

Watch for a similar roll-out pattern to Australia, where Telstra has already upgraded its NextG network to 21Mbit/s - and in fact 43Mbit/s in places - but only in limited urban locales.

The next question: where’s the hardware?

Telecom quietly dropping its original talk about XT launch at 14Mbit/s simply because there’s a complete lack of cellphones that support HSPA+ and a paucity of data cards.

But during a recent visit to New Zealand, Qualcomm senior director for business development, Robert Hart, said at least three data card makers - Sierra Wireless (which currently has 7Mbit/s product for Telecom XT), ZTE and Huawei (maker of Vodafone’s current line) will all soon have 21Mbit/s cards ready for local release.

Mr Hart is in a good position to know. His US company’s W-CDMA chipsets sit inside most of the world’s cellphones (and most of those that don’t license it). Qualcomm’s inside word is that 21Mbit/s and faster HSPA+ support will soon be standard in most high-end cellphones, too.

I’m not expecting dancing bears at Vodafone’s demo later today.

After all, Telstra tells customers to expect a real-world download speed of 8Mbit/s on the 21Mbit/s iteration of its NextG network.

Still, even at ‘only’ 8Mbit/s, you’re still getting DSL landline equivalent speed on your cellphone or mobile data card. If Vodafone keeps up its recent habit of throwing around big clumps of free data, that’s got some serious potential to turn the market on its head.

Incidentally, although we're doing pretty well keeping up with the Joneses internationally, New Zealand is by no means at the top of the pack. In Sweden and the US, carriers are readying LTE or so-called 4G networks for commercial release, hitting speeds of up to 160Mbit/s.

Telecom and Vodafone both say they'll weigh potential LTE (Long Term Evolution) upgrades in 2010 or later. The arms race continues.