The third-largest wireless carrier in the U.S., Sprint Nextel Corp. ( S - Analyst Report ) , plans to launch its high-speed 4G LTE services on July 15. Initially, the services will be deployed in five markets - Atlanta, Dallas, Houston, Kansas City and San Antonio.

This move will boost Sprint’s competitive position related to LTE deployments. Currently, the company is about a year and a half way behind the wireless giant Verzion Communications Inc. ( VZ - Analyst Report ) and 10 months behind the second wireless carrier AT&T Inc. ( T - Analyst Report ) in deploying LTE networks.

Sprint expects to complete the nationwide deployment by the end of 2013. The LTE coverage is expected to extend to more than 250 million customers with 22,000 cell sites by 2013.

The 4G LTE evolution signals a shift from the company’s current WiMax network, a wireless broadband technology offered in collaboration with Clearwire Corporation ( CLWR - Snapshot Report ) . The development is a part of Sprint’s network upgrade plan, Network Vision, which aims to combine various 3G and 4G technologies into one seamless network.

As part of the Network Vision plan, the company is concentrating on the core Sprint platform, which includes CDMA, WiMAX, LTE and other network technologies. The company started terminating the Nextel platform, which refers to the iDEN business. Sprint intends to decommission 30,000 cell sites to 38,000 from the existing 68,000, of which 9,600 cell sites will be shut down by the end of the third quarter and the remaining in the next year.

The Network Vision plan would lead to the efficient use of capital, reduction of cell sites, the elimination of dual networks, backhaul efficiencies, reduced churn, lower roaming charges and energy cost savings. Hence, the network restructuring is expected to generate $10 billion to $11 billion in savings over seven years (2011-2017). The company expects the Network Vision deployment to be over by the end of 2013.

No doubt, this investment will dilute Sprint’s free cash flow for the next two years. However, liquidity is expected to improve once LTE is fully deployed.

Moreover, the company will have to pay for subsidizing the Apple Inc.’s ( AAPL - Analyst Report ) iPhone. Sprint has promised to buy about 30.5 million iPhones from Apple over the next four years and pay $500 to subsidize the product. The iPhone will nevertheless help Sprint to gain new customers while retaining the old ones. This will lead to increased subscriber growth, reduced churn and higher average revenue per user.

We are maintaining our long-term Neutral recommendation on Sprint. For the short term (1–3 months), the stock retains a Zacks #2 (Buy) Rank.