It's no secret that Sprint Nextel Corp. (NYSE: S) has been losing hordes of customers in the last year as it continues to struggle with not only its dual-network business model but with retaining customers. Although rumors of another large wireless telecom company buying Sprint Nextel have surfaced recently, nothing has really panned out. However, the most serious rumor has now just shown up at the door.

South Korean wireless telecom giant SK Telecom is apparently in talks to buy the struggling U.S. wireless carrier according to reports this week. However, there have also been reports that the company just wants to "partner on technology" with Sprint. Whatever the outcome may be, Sprint trades at just over $9 per share at this time, so a merger attempt now would be timed right. Since SK Telecom's market value is only about half that of Sprint's, private financing was suggested as the tool that would make a deal possible. Sprint may have had recent problems, but it's still the third-largest carrier in the U.S. with over 52 million customers. That's nothing to sneeze at.

Then again, SK Telecom may only make a partial investment in Sprint (a technology partnership, perhaps), in case it can't come up with the financing sources for an outright purchase. Similar to German telecom giant Deutsche Telekom -- which owns U.S. carrier T-Mobile USA -- the South Korean company wants a major presence in the U.S. Considering the top five wireless carriers in the U.S., Sprint Nextel is by far the most likely to give it the needed presence as the other four in the top five are already accounted for.

I've seen it many times: a cool product that finds few customers. That seems to be the case with Helio's mobile phones. Basically, customers didn't want to pay premium prices for such things as access to MySpace and other new-fangled features.

It's a tough lesson (and expensive). SK Telecom and EarthLink (NASDAQ: ELNK) formed Helio as a joint venture in 2005 with start-up capital of $440 million. SK Telecom invested an additional $270 million in the venture last year.

Yet, in the end, Helio turned out to be a big dud. That is, the company sold out for a measly $39 million to Virgin Mobile USA (NYSE: VM). In fact, the space is full of dead companies, such as Disney Mobile and Amp'd Mobile.

I had a chance to interview Frank Dickson, the co-founder and chief research officer of MultiMedia Intelligence. According to him:

Honestly, the merger is a desperate move. Overall, the MVNO (Mobile Virtual Network Operator) model makes sense in a limited number of situations. For example, if a cable MSO wants to leverage its customer base and offer triple or quadruple play offering, there is a clear distinctive competency and the MVNO route makes sense.

Since its IPO last year, the shares of Virgin Mobile USA Inc. (NYSE: VM) have imploded -- going from $15.69 to a low of $1.90. The stock has lifted somewhat lately though, and is now trading at $3.43.

Actually, the company has confirmed that it is talking with Helio -- majority owned by SK Telecom (NYSE: SKM) -- about a possible merger.

Both companies are known as mobile virtual network operators (MVNOs), which means that they provide cell services by using another carrier's infrastructure. Unfortunately, the MVNO model has been extremely difficult to pull off (in fact, there have been several high-profile blow-ups in the space, such as Amp'd).

So will a combination help things?

To get some perspective on things, I had a chance to interview Frank Dickson, who is the Chief Research Officer at MultiMedia Intelligence. According to him:

How often does a company walk away from a $5 billion investment without even meeting with the people who made the offer? Sprint's (NYSE:S) board appears to have done that a week or so ago.

A team of Korean cell company SK Telecom and Providence Equity Partners suggested a $5 billion investment in a convertible security that would have set a price well above the current share value of just over $15. Not a bad deal. According to The Wall Street Journal, "the group said in a bid letter to the board that it was prepared to invest $5 billion or 'potentially substantially more' in the form of securities convertible into equity after some period of time at a stock price 20% higher than Sprint's share price."

But there was one catch. The group wanted former Sprint chairman Tim Donahue to run the company. Donahue was CEO of Nextel before it merged with Sprint.

The Sprint board did the right thing. There is no reason to believe that the company would not be able to raise capital elsewhere, although the terms may not be as good. It might even get a strategic investment from a large cable company that would want to market wireless products along with broadband and TV. But even if the investment is attractive, Donahue is an architect of one of the largest merger train wrecks of the last decade, a debacle that cost the Sprint CEO his job just two months ago.

Getting one of the villains to come back and play sheriff would send a very bad message to investors. They have already been hurt enough by poor earnings and a falling stock price.

Douglas A. McIntyre is an editor at 247wallst.com.

Sprint Nextel (NYSE: S) has seen its shares rise as much as 16% as of Monday afternoon (after market close) as rumors and talks of a possible buyout began circulating in the media. This time, instead of Sprint rumors related to a Verizon (NYSE: VZ) buyout, South Korea's SK Telecom was seen as possible suitor for the third-largest wireless carrier in the U.S. behind AT&T (NYSE: T) and Verizon Wireless.

SK Telecom, South Korea's largest telecom operator, owns the MVNO (mobile virtual network operator) Helio, which rents airwaves from Sprint already. When asked, SK Telecom said that a possible takeover rumor regarding Sprint was "groundless". Generally, a descriptive word like that is defensive enough to make some think that no takeover is in the works. However, half the time cover is laid, the rumor turns out to be true. SK Telecom even used harsher language to state that the rumor was not true.

Perhaps SK Telecom needs to dredge up more than about $62 billion to wrest control of Sprint Nextel (based on closing price Monday afternoon) before it starts warming to the rumors. It would make the $18 billion SK Telecom buyout quite large since Sprint's valuation is more than three times its own. Would SK Telecom take such a large risk to own a national wireless carrier with one of the largest 3G wireless data networks in existence, along with 53 million customers? Never say never -- those kinds of figures would make some lick their chops if they believe the future is all-wireless. Perhaps a partial deal is more palatable for SK Telecom than an entire takeover?

We've all experienced unsatisfactory customer service at some point. Slow service from a bartender, inattentiveness in a clothing store, interminably futile telephone conversations with utilities companies. Some of us can quickly brush aside these transgressions; others might take comfort in writing a strongly-worded letter (or seven).

One Korean man, Kim (the lone name that has been released in the press), took a slightly more dramatic approach, barreling a friend's borrowed Mercedes S500 into the South Korean lobby of SK Telecom's (NYSE: SKM) offices. Consumerist.com quoted Kim as saying: "The Samsung Anycall call phone that I bought from a [SK Telecom] distributor . . . didn't work at all."

Before taking these drastic measures, the disgruntled consumer said he placed 16 calls to his carrier's customer service department and visited the head office twice. An employee suggested Kim simply replace his phone with a newer model because the old version was no longer available.

No word yet on the repercussions facing Kim (on the part of either Samsung or his friend from whom he borrowed the Mercedes.)

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.