UPDATE 1-Sprint, Clearwire shares rise on WiMax report

(Adds details, analyst quote, share price update)

NEW YORK, Jan 29 (Reuters) - The shares of Sprint Nextel Corp (S.N) and Clearwire Corp (CLWR.O) both rose sharply on Tuesday following a Wall Street Journal report they have revived joint venture talks to build a high-speed wireless network using WiMax technology.

Citing people familiar with the matter, the Journal said in an online report the venture could bring in funding from the likes of Intel Corp (INTC.O), Google Inc (GOOG.O) and Best Buy Co Inc (BBY.N) to help lower its price tag.

The companies named in the story declined comment.

Sprint, the No. 3 U.S. mobile service, closed up 8 percent at $10.80 on the New York Stock Exchange, still down about 38 percent in the last year. Its shares have been depressed by subscriber losses amid customer service and network problems.

Clearwire jumped 23 percent to $15.34 on Nasdaq.

Last November, Sprint said it had scrapped a WiMax partnership with Clearwire under which the companies would have joined forces on marketing, distribution and network access. It said at the time that it would keep talking to Clearwire.

The Journal said Sprint and Clearwire are in serious talks on a more ambitious plan that would involve spinning off Sprint's WiMax unit and merging it with Clearwire. But it noted there was no guarantee the joint venture would materialize, or that external funding could be secured.

In December, Sprint said it was looking at possibilities to attract outside funding for WiMax amid investor concerns over its plan to spend $5 billion on the emerging technology that boasts high data rates over long distances, but has yet to be proven commercially.

Also in December, Sprint announced a new Chief Executive, Dan Hesse, replacing Gary Forsee, who had signed the original deal with Clearwire.

JPMorgan analyst Jonathan Chaplin said a combination of Sprint's WiMax assets with Clearwire would make sense and that it would be a "matter of time before a deal is finalized."

"Combining the assets makes nationwide coverage possible, which substantially improves the utility of the service and the strategic value to players like Intel and Google," he said in a note to clients on Tuesday.

Web search leader Google said last year that it would deliver its services to Sprint's WiMax customers. There has been much speculation about Google's intentions in wireless.

It qualified to participate in a government auction of wireless airwaves that is going on right now. The company said it could not comment on the story because of Federal Communications Commission anti-collusion rules.

Google has also said it is developing a cell phone operating system with wide industry support.

Intel, already an investor in Clearwire, has long been a promoter of WiMax technology as it expects to sell chips based on the emerging technology. (Reporting by Sinead Carew and Yinka Adegoke; Editing by Jeffrey Benkoe/Andre Grenon)