Even before its 3G network’s launch, Telecom has announced plans to triple XT’s speed to 21Mbit/s - that is, faster than most landline DSL connections - by year’s end. Vodafone hits back with its own upgrade plan, running to 4G. Welcome to the mobile arms race.

Some at Vodafone and Telecom (and Telecom especially investors) would like to sit back and reap the benefits of a cap-ex splurge that has seen the two telcos spend $1 billion between them on their respective W-CDMA upgrades.

Telecom’s decision, announced yesterday, to roll out an 850MHz WCDMA 3G network was the correct choice, says telecommunications analyst Paul Budde, of Paul Budde Communications.

The veteran commentator says Telecom’s single frequency network will be cheaper and faster to build than Vodafone’s 900MHz/2100MHz WCDMA 3G alternative.