Sprint, Clearwire up on Wi-Max cable joint venture

NEW YORK (Reuters) - Shares of Sprint Nextel Corp (S.N: Quote, Profile, Research, Stock Buzz) and Clearwire Corp (CLWR.O: Quote, Profile, Research, Stock Buzz) rose sharply on Wednesday after reports that both companies are in talks with the two biggest U.S. cable operators to create a nationwide wireless company.

The new $3 billion joint venture would be partly funded by contributions of about $1 billion from Comcast Corp (CMCSA.O: Quote, Profile, Research, Stock Buzz), the largest U.S. cable operator, and about $500 million from Time Warner Cable (TWC.N: Quote, Profile, Research, Stock Buzz), the second-largest, people familiar with the talks told Reuters on Tuesday.

Sprint shares rose as much as 8 percent in early trading before easing back to $6.65, a rise of 3.6 percent. Clearwire was up 9.7 percent at $14.69 after jumping as much as 18 percent.

The joint venture would use WiMax technology to support Internet access at speeds up to five times faster than traditional wireless networks and could support a range of mobile and video applications. It is seen as a potential substitute for fixed-wire high-speed Internet that, for instance, could be offered across an entire metropolitan region.

Shares of Sprint and Clearwire's larger rivals were lower on Wednesday morning.

Verizon Communications (VZ.N: Quote, Profile, Research, Stock Buzz) was down 3 percent at $35.80, while AT&T Inc (T.N: Quote, Profile, Research, Stock Buzz) fell 1.7 percent to $37.36.

(Reporting by Yinka Adegoke; Editing by Lisa Von Ahn)