Marguerite Reardon/CNET

Sprint Nextel will launch its own 4G LTE network early next year.

The company is already installing LTE equipment and has been field testing the network in select areas, according to people familiar with the situation. It hopes to launch commercial service by the end of the first quarter or beginning of the second quarter, although the target could move up. It's unclear how many markets would get the service initially.

The LTE rollout is part of the company's broader Network Vision plan. With the costs already accounted for in its prior forecast, the LTE network won't require any additional capital investment.

The accelerated deployment underscores how critical it is for the carriers to keep pace with rapidly evolving wireless technology. While Sprint long enjoyed a technical and speed advantage over its rivals through its partnership with Clearwire and its 4G WiMax network, much of that edge has faded as Verizon Wireless surpassed it with a wider deployment of its own faster LTE network.

Sprint's 4G LTE network would give the carrier a network on par with Verizon's, supplying the nation's third-largest carrier with an additional selling point beyond attractive pricing plans and an unlimited data offering. By employing LTE technology, it will be able to tap into a larger pool of vendors already racing to build 4G devices and equipment at a lower price. The additional network will also allow Sprint to offload some of its 3G data traffic onto 4G, relieving a growing burden.

Sprint Chief Executive Dan Hesse previously said Sprint would formally unveil its 4G plans at an event on October 7, pushing back what originally was scheduled for an announcement by the middle of the year.

October is shaping up to be a big month for Sprint, with the carrier reportedly getting the iPhone and announcing its 4G plans in a span of a few weeks.

Sprint spokeswoman Leigh Horner declined to comment, saying only to wait until the company's event next week.

Network Vision the key

Sprint is opting to use its G-block spectrum, which it got from its acquisition of Nextel. Sprint plans to also use spectrum that will be freed up once it shuts down its Nextel network, which runs on a 2G technology called iDEN, best known for its walkie-talkie-like feature. The company previously said it expects to shut down the iDEN network by 2013.

Sprint is also using the same FD-LTE variant as Verizon, as well as LightSquared, which recently signed an agreement to use Sprint's infrastructure to power its wireless network. That deal is still in the air, as LightSquared awaits approval to use its spectrum amid concerns its network would disrupt critical GPS equipment.

The 4G component is part of Sprint's grand Network Vision plan, which represents a massive overhaul of its entire network infrastructure. The project, which is expected to cost $4 billion to $5 billion over the next three to five years, will swap in new equipment that can run multiple wireless technologies, from its 3G CDMA network to LTE.

The $4 billion to $5 billion estimate, which will be doled out to vendors L.M. Ericsson, Alcatel-Lucent, and Samsung Electronics, also includes its 4G deployment.

Sprint has said that the project will save the company between $10 billion and $11 billion over a seven-year period.

Sprint and Clearwire still partners

For years, Sprint has relied on Clearwire, which uses an alternate, but older, 4G technology called WiMax. But for the past year, Sprint has been looking at its own options. Clearwire's financial issue has slowed its network expansion to a crawl, allowing Verizon to blow past it with its broader network deployment. Clearwire hasn't expanded into a new market since late last year.

Clearwire recently unveiled plans to move to another flavor of LTE called TD-LTE. But the rollout is contingent upon the company finding $600 million in additional financing. Chief Executive Eric Prusch told CNET last week that getting the necessary financing was a priority. The company could either offering additional equity or debt, or, more likely, sell non-essential bits of spectrum.

At first blush, it would seem the two are moving in divergent directions. But Clearwire, which counts Sprint as its majority shareholder and largest customer, will still play a role in the 4G plans. The companies plan to use chips that are compatible with both LTE standards to allow Clearwire devices to run on Sprint's network. Qualcomm, for example, offers the MSM8960 chip, which can run on both LTE and TD-LTE networks.

Still, Clearwire isn't expected to play a major role in Sprint's 4G announcement, the people said. Neither is LightSquared or any other potential partners.

"On October 7, we're focusing on Sprint and our network," Hesse said to investors during a conference hosted by Goldman Sachs last week.

Rivals gaining

Even as Sprint touts running "America's favorite 4G network," based on the number of subscribers on its next-generation network, the company is slowly losing its competitive advantage against its rivals.

Verizon will be in 160 markets with its 4G LTE network by next month, and seemingly expands into a new market each week.

AT&T, meanwhile, recently launched its 4G LTE network in five cities, including Dallas and Chicago, and has accelerated the schedule for a wider deployment.

T-Mobile has already covered its entire footprint with an enhanced 3G network it calls 4G, but which PC Mag has said is faster than WiMax. AT&T hopes to acquire T-Mobile and the combined spectrum for its LTE network, although the Department of Justice has sued to block the deal. T-Mobile yesterday unveiled the HTC Amaze 4G and its version of the Samsung Electronics Galaxy S II, the first two smartphones to use its newly upgraded network, with speeds comparable to a 4G network.

Sprint offers 4G WiMax service in 71 markets, with its last major expansion into the major cities occurring late last year. By moving to LTE, it would have to start over in deploying a brand new network.

But Sprint will be using a technology on par with its rivals, and will finally be in control of its own next-generation network.

Corrected at 10:27 p.m. PT: to say Sprint would be using its G-block spectrum, not D-block.