T-Mobile USA, the No. 4 U.S. mobile service, said that by the end of this month it would be less than half way through its 2010 network upgrade plan aimed at boosting its mobile data web-surfing speeds.

The unit of Deutsche Telekom AG hopes that increasing data speeds will help it stem customer defections to bigger and smaller rivals. It is upgrading to a technology known as HSPA Plus from HSPA.

Chris Hillabrant, a vice president for engineering and operations, said the company would have HSPA Plus coverage in markets with more than 75 million people by the end of June. It plans to have coverage for 185 million by year end.

We're actually on target and ... definitely picking up steam. Hillabrant told Reuters.

The company currently offers HSPA Plus services to laptop users and has plans to sell at least one HSPA phone in the second half of the year.

Hillabrant said that because the upgrade improves overall network capacity it is already improving Web speeds on about a dozen of T-Mobile's existing phones.

As part of the upgrade, the company has also beefed up wired connections to its mobile broadcast towers.

Because the upgrade reduces the company's cost per megabyte, the executive said that he dos not see the company charging extra for the higher speeds any time soon. T-Mobile USA tends to appeal to more value conscious consumers.

It has been losing out to bigger rivals such as AT&T Inc, the exclusive U.S. provider for iPhone, and to smaller rivals like Leap Wireless and MetroPCS Communications, which also target customers on a budget.

(Reporting by Sinead Carew; Editing by Steve Orlofsky)

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