Instead, wireless firms are highlighting gains in their wireless data business, which includes Internet access and messaging.

For the third quarter, Verizon Communications (NYSE:VZ - News), Sprint (NYSE:FON - News) and Cingular Communications reported big hikes in wireless data, though their numbers lag foreign carriers such as U.K.-based Vodafone (NYSE:VOD - News).

The increase helps justify the billions of dollars many U.S. carriers are spending to upgrade wireless networks to carry data at faster speeds.

"The U.S. wireless market has made tremendous strides forward in terms of data usage," said Roger Entner, an analyst at research firm Yankee Group. "It's 5% to 8% of revenue in some cases.

"What is particularly encouraging is that the U.S. wireless data growth is based on mature Internet-type data services -- games, e-mail, and browsing news and sports sites -- not person-to-person messaging like in Europe."

$7 Per Month Average

That's encouraging because text-messaging growth is slowing in Europe.

Another U.S. bright spot is that a good chunk of data revenue comes from users of laptop computers and PDAs, not mobile phones, which broadens the carriers' market.

Take Verizon Wireless, owned by Verizon Communications and Vodafone. It says 14.6 million subscribers, one-third of its users, access data services. Those customers spend an average of $7 a month on data.

Verizon says that last quarter nearly 5%, or $300 million, of its revenue came from data, up from 2.3% in the year-ago quarter. It has focused on business users.

"Half of revenue is text messaging," said Verizon Wireless Chief Executive Dennis Strigl. "The other half is not. It's remote access and (ring tones, games) downloads and multimedia."

Last quarter, Sprint posted $253 million in data sales, almost 8% of overall revenue.

"Wireless data is now a $1 billion annualized revenue stream," said Sprint spokesman Scott Stoffel.

Sprint says 7.3 million subscribers get data services, more than 40% of the 17.3 million customers it serves directly. (With affiliate customers, it serves 32.2 million overall.)

About 5.6 million use Sprint's Vision service, which provides advanced features such as PictureMail and video messaging. It offers a wide variety of service packages at a wide variety of prices.

Cingular, owned by SBC Communications (NYSE:SBC - News) and BellSouth (NYSE:BLS - News), says its third-quarter data revenue more than doubled to $133 million. And AT&T Wireless, bought last week by Cingular, says its data revenue rose 145% to $140 million. Both Cingular and AT&T Wireless say data accounted for 3.5% of total revenue.

T-Mobile USA said that in the second quarter, data were 5% of revenue from customers under contract, which excludes prepaid subscribers. The Deutsche Telekom (NYSE:DT - News) unit hasn't reported third-quarter results.

Some Feel Data's Costly

Nextel (NasdaqNM:NXTL - News), which released data figures for first time, said its customers spent about $2 a month on data services in the third quarter, up 50% from a year earlier. It has the slowest data network among the five major U.S. carriers.

The data numbers might rise. Consulting firm A.T. Kearney says 41% of wireless phone users it surveyed expect to use mobile data services daily within the next year. It surveyed 4,500 users in 13 countries.

The survey says demand for games, music downloads and photo messaging is picking up. But 35% of those surveyed still view mobile data services as too costly.

For unlimited monthly data access, Verizon charges $80 a month. Derek Kerton, principal of consultant Kerton Group, says prices will stay near current levels because of limited capacity on data networks.

He says wireless firms can't offer unlimited access at lower prices because that would spur much more usage and overload networks. But the next round of network upgrades will help, he says.

InStat says mobile gaming will generate $1.9 billion in yearly revenue in the U.S. by 2009, up from $204 million in 2004. The research firm also says mobile video services will generate $5.4 billion in revenue in 2009, up from $53 million this year.

Wireless firms are also developing phones that will download music. Those phones should be widely available in nine months, says InStat's Clint Wheelock.

The big area will be video, he says. He cites heavy user interest in live-TV such as the World Series (news - web sites), movie trailers, music videos and news.

"Mobile video is mass market," he said. "There's more demand for video than gaming or music downloads."