Sprint plans to turn on its LTE service in 10 markets before the middle of this year, including Atlanta, Dallas, San Antonio and Houston.

CEO Dan Hesse, who made the announcement at the Citi investor conference in San Francisco yesterday, said the launches were part of Sprint’s $5 billion network modernization project, dubbed Network Vision.

Sprint currently depends on Clearwire’s WiMAX service for its 4G offering, but the scope of Clearwire’s network has been limited by ongoing funding problems.

By launching its own LTE network, Sprint will be better able to keep pace with the LTE services offered by AT&T and Verizon Wireless. Clearwire plans to overlay part of its WiMAX network with LTE and lease the extra capacity to Sprint.

“Think of the Clearwire network almost as a hotspot,” Hesse said. “They’ve tended to build in the markets where we have the most traffic in.”

Sprint will begin to sell the first devices compatible with both its own LTE network and Clearwire’s supplemental capacity some time in 2013, Hesse said.

The project’s first multimode base station with LTE and CDMA 1X EV-DO went live in Branchburg, N.J., last month. About 22,000 of the base stations are expected to be installed by Sprint vendors Alcatel-Lucent, Ericsson and Samsung.

The equipment will improve service for Sprint customers with better voice quality, data speeds and signal strength, helping Sprint compete with rivals AT&T and Verizon Wireless.

The first live Network Vision base station was compatible with LightSquared’s 1.6 GHz spectrum as part of a network hosting deal the venture-backed company signed with Sprint in July. But LightSquared’s ongoing problems getting FCC clearance for the network because of problems with GPS interference have apparently put the brakes on the project, Hesse said.

“We’re not investing any more in LightSquared,” he said. “The 1.6 – we put that on hold for now.”

Sprint recently granted LightSquared a 30-day extension on a Dec. 31 deadline to get FCC approval for its network. In the meantime, Sprint is holding off on installing any more equipment for the service.

Hesse also touched on Sprint’s unlimited plans, which it recently stopped offering for data-only devices like USB modems.

The “plan is to continue unlimited,” but not for everyone. Sprint is using clauses in its terms and conditions governing data use to rein in the 1 percent of subscribers who abuse the service, Hesse said.

“For the vast majority of customers, it’s an unlimited experience,” he said.