Cell towers are everywhere. Source: Flickr/Carl Lender.

LTE network coverage is an important consideration when choosing a wireless provider. While coverage in large cities may be relatively similar among AT&T (NYSE:T), Sprint (NYSE:S), T-Mobile (NASDAQ:TMUS), and Verizon (NYSE:VZ), the four major carriers, there are still major disparities in coverage throughout most of the United States.

For investors, it pays to know where each carrier stands in terms of its LTE network buildout and coverage compared with the competition. LTE, which stands for Long Term Evolution, doesn't necessarily meet the lofty 4G standards set forth by the International Telecommunications Union, but does indicate an improvement over the previous-generation 3G networks. As a result, LTE networks often have a wide disparity in downstream speeds. As the smaller carriers gain ground on the bigger guys, network capacity and density -- which directly impact speed -- will come more into focus. So let's look at where each carrier stands today, and where they're going.

During AT&T's first-quarter earnings conference call, CFO John Stephens told analysts the company's LTE network now covers 308 million people. While its geographic coverage is smaller than Verizon's footprint, it can now claim to cover the same number of people with its "ultrafast" network.

According to RootMetrics, however, AT&T still lags behind Verizon in average network speed. Increasing the capacity of the network will allow AT&T to increase its average speed for customers. To that end, the company has plans this summer to deploy its 2.3 GHz WCS spectrum, which should help ease capacity constraints in major cities.

Another path to easing capacity constraint is the AWS-3 spectrum that AT&T paid more than $18 billion for at auction. Those licenses won't be cleared and ready for service until 2017; however, the company also has the legacy CDMA network it acquired from Leap. It's already transitioning some of that network capacity, but it will be able to do so in earnest once it completely shuts down that network and moves all of Leap customers to its GSM network. The company expects to complete the Leap shutdown before the end of the year. 

Sprint's LTE network covered 280 million people as of its latest update. It's important to note, however, that its 2.5 GHz spectrum covers only 125 million people at this point. The 2.5 GHz spectrum enables Sprint to improve its network speed through carrier aggregation.

Currently, Sprint offers the slowest network speed among the four major wireless carriers. With a boatload of 2.5 GHz spectrum licenses available, the company is focused on deploying that spectrum in congested markets rather than building out its network to rural areas. The strategy should help Sprint lower its churn rate, which was 1.8% in its fiscal fourth quarter, a 46-basis-point decline from the third quarter.

T-Mobile is rapidly closing in on AT&T and Verizon in terms of LTE network coverage. The company announced that its network now reaches 280 million people, and it plans to reach 300 million before the end of the year. The company continues to focus on deploying its low-band 700 MHz spectrum, which it acquired from Verizon for $2.4 billion last year.

The low depth of the 700 MHz spectrum practically requires T-Mobile to build out a dense network, so the 280 million people it does cover with its LTE network often receive top speeds. As T-Mobile deploys the rest of 700 MHz spectrum, its average network speed will only continue to improve.

The company purchased a small bit of spectrum at the AWS-3 auction, but it already has a good amount of spectrum around the same bandwidth in its portfolio. The company is also set to shut down the MetroPCS network next month and can repurpose the spectrum for its LTE network.

Like AT&T, Verizon covers 308 million people with its LTE network. The company's network buildout is practically complete, and it will rely on its rural network partners for additional reach. In the meantime, the company is solely focused on increasing capacity and density to improve its network performance.

Verizon is the most popular wireless carrier in the country, but it faces some capacity constraints. The AWS-3 spectrum it purchased at auction for $10 billion won't roll out until 2017, and the company will rely on refarming its old network capacity to improve its LTE network in the meantime. The company has also committed $500 million per year over the next three years for deploying small cells in certain markets where it's particularly capacity constrained.

What does this all mean for investors?
While Sprint seems resigned to improving its current network without expanding its reach, T-Mobile is still working to expand its LTE network to the same size as its larger competitors. Once T-Mobile reaches parity with AT&T and Verizon, it could put even more pressure on the big two wireless carriers than it already does. That could get more customers to switch to T-Mobile, or it could mean lower margins at AT&T and Verizon as they attempt to compete on price and maintain low churn rates.

T-Mobile's and Sprint's advantage comes from holding much more network capacity than the larger carriers, and they'll maintain that advantage until the AWS-3 spectrum is ready to roll out. I wouldn't expect either company to rest on its laurels, however, and they should be looking to purchase additional spectrum licenses on the secondary market to stay competitive in the long run.