Wall Street is speculating that a merger between Nextel Communications and Sprint is becoming more and more likely, the Wall Street Journal reported on Thursday in its Heard on the Street column.

A merger would enable Nextel, the No. 5 U.S. mobile provider, to have access to more radio-wave spectrum, which is necessary to transmit wireless phone calls, the newspaper said. It added that a planned network upgrade by Nextel could lead to the adoption of the CDMA technology that Sprint, the No. 3 provider, already uses.

The combination would also form a wireless carrier that would be big enough--with about 38.5 million subscribers--to rival industry heavyweights Cingular Wireless and Verizon Wireless, according to the Journal.

It also said that Nextel seriously discussed the idea of buying AT&T Wireless Services before it was bought by Cingular earlier this year, and that its executives talked about bidding for Sprint, though that has yet to happen, citing a person familiar with the matter.

A deal could involve Sprint spinning off its land line business so that a combination between Nextel and Sprint would be a pure wireless company, the Journal cited one Wall Street banker as saying.

Nextel and Sprint representatives were not immediately available for comment.

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