T-Mobile USA plans to start doubling the speed of its high-speed wireless data network this year to 42 megabits per second, joining a race toward higher-speed networks to make its service competitive with Verizon Wireless'.

T-Mobile USA, a unit of Deutsche Telekom, also told reporters at the Consumer Electronics Show it would not charge a premium fee for its highest-speed wireless service, directing a thinly veiled dig at bigger rival Sprint Nextel, which charges extra for its advanced service.

Its bigger rivals Verizon Wireless and AT&T Inc also chose CES to showcase their fastest networks and unveil gadgets intended to take advantage of blazing Web speeds.

The No. 4 U.S. mobile service is looking to get more out of its existing network technology because it would need new wireless airwaves to go to new technology known as LTE, which its rivals are investing in.

Chief Executive Philipp Humm said the company has plenty of wireless airwaves to support its services for the next two to three years, but is currently looking at multiple options for ways to expand its spectrum holdings and go beyond this.

The most important thing is for us medium-term will be to have additional spectrum, Humm told Reuters on the sidelines of the event.

Options could be to buy spectrum in a government auction or from smaller provider Clearwire Corp. T-Mobile USA is also looking at the potential for a partnership where it could use the Clearwire network or one being planned by a new company Lightsquared.

But Clearwire needs more funding to expand its network while Lightsquared, which also needs new funding has yet to build its network.

In the meantime, T-Mobile USA said the speed upgrade announced Thursday will be a relatively cheap software upgrade but would allow it to compete head-to-head with Verizon Wireless, a venture of Verizon Communications and Vodafone Group Plc.

With 42 and LTE, there's very little difference, T-Mobile USA Chief Technology Officer Neville Ray said.

T-Mobile USA currently offers services of 21 megabits per second in markets with 200 million people. It expects to be able to upgrade two thirds of its current market footprint to 42 megabits per second this year.

It sees customers opting for higher-speed networks in order to use applications such as video conferencing or multi-player gaming.

(Reporting by Sinead Carew; editing by John Wallace, Bernard Orr)

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