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Carriers are also hiring networking companies like Cisco and Juniper to help dramatically improve their backhaul -- the engines that power the traffic through the networks.

For instance, Cisco recently unveiled a router that can offer download speeds of 322 Terabits per second, which is fast enough to download the entire printed collection of the Library of Congress in 1 second.

"Before the iPhone, we couldn't imagine who would need a terabit router," Sharma said. "But soon that won't be nearly big enough."

The on-ramps and off-ramps to and from the cell sites are also getting improved. AT&T is growing their number of fiber-optic connections, and Clearwire is deploying microwave connections at its towers.

NEXT: Getting creative
Last updated December 27 2010: 5:35 PM ET

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