Sprint (News - Alert) Nextel Corp. may be about to purchase a smaller competitor. While we all witnessed what often happens when wireless carriers try to acquire one another (witness last year’s debacle of AT&T’s failed bid to acquire T-Mobile (News - Alert) USA, Inc.), Sprint may have hit on a winning strategy of keeping its acquisitions small.

The nation’s number three ranked wireless carrier is apparently seeking to acquire a smaller competitor, perhaps a prepaid carrier such as MetroPCS (PCS) Communications Inc., according to Goldman Sachs. Jason Armstrong, a Goldman Sachs analyst in New York, told Bloomberg BusinessWeek that Sprint’s escalating stock price, which has more than doubled this year, is stoking speculation that some kind of deal is in the near future. In addition to MetroPCS, it’s being speculated that Leap Wireless International (News - Alert) Inc. (LEAP), another pre-paid model carrier, is another probable takeover candidates.

It’s also being said that Sprint and T-Mobile USA could potentially form a network-sharing agreement, enabling the nation’s number three and number four carriers to compete more effectively with the giants, number one ranked Verizon (News - Alert) Wireless, with 37 percent of the U.S. wireless market, and number two AT&T, which controls 35 percent.

While there has been talk in the wireless industry of a potential purchase of T-Mobile by Sprint, Armstrong says this is “aspirational rather than likely.” A smaller prepaid carrier may be a better acquisition target for Sprint if it is determines to pursue mergers and acquisitions, he said.

Sprint has declined to comment on its acquisitions aspirations.

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