• GigaOm, Tuesday, November 13, 2007 10:45 AM

Things have been looking down for telecom giant Sprint Nextel for some time. Following the resignation of CEO Gary Forsee, the company's WiMAX plans are up in the air. Investors see WiMAX as a huge risk, particularly for a company that's recently been under-performing so badly. Last week, Sprint announced it was halting its joint venture with Clearwire, citing Forsee's departure and the complexity of building a nationwide WiMAX network.

Now, rumor has it that Google might be interested in buying Sprint. With the search giant's mobile ambitions are on the table, it's clear that the biggest impediment to the company's success is that it must work with carriers like Sprint to get Android-powered phones running on their networks. Of course, open source scares them, so a Verizon or AT&T might be hesitant to strike deals with makers of the Google powered handsets. So what's a Web giant to do? Buy a network operator like Sprint and then spin off the phone business.

In another scenario, Google could then spin off Sprint's WiMAX business while maintaining a hefty chunk of equity in the company. It could then invite Cisco, Apple and other tech A-listers to invest in the WiMAX project, as long as everyone agrees it would operate as a wholesale wireless broadband network--each of these companies would love to break the broadband cable and DSL "duopoly."

Read the whole story at GigaOm »