Red Herring suggested that Sprint (S) hire telecom pioneer and Clearwire (CLWR) CEO Craig McCaw to replace exiting chief Gary Forsee. But, McCaw has a day job, so that probably won’t happen.

Sprint has said that it will pay almost $5 billion to build out a national WiMax network to bring ultra-fast wireless broadband to its customers. Clearwire, financed by Intel (INTC) and Motorola (MOT) before its IPO, is building a network of its own. Depending on which Wall St. analyst is doing the math, Clearwire will have to borrow $2 billion or $3 billion to complete its network. The two companies have already agreed to "share" their networks by allow customers from one company to use the other’s wireless broadband footprint.

Most mergers are a 1 + 1 = 1.5. The risks of merging Sprint and Clearwire are daunting. Sprint’s current customers seem to hate the company and it is losing subscribers while rivals AT&T (T) and Verizon Wireless pick them up.

But, the number of big companies supporting WiMax worldwide is impressive. Nokia (NOK) has agreed to build base stations and has a stake in offering handsets as well. Samsung has also joined the alliance of companies pushing the 4G technology.

In short, there is a lot of weight behind making WiMax work.

Trading around $20, Clearwire has not been a big stock market success. Its shares got a nice lift to $35 when it announced its WiMax alliance with Sprint. But, the shares are off at $21. Clearwire’s current debt load is modest at $655 million, but, if it has to go it alone, that will rise. The company’s market cap is $3.4 billion.

Sprint’s market cap is $51 billion. Its revenue run rate is about $10.5 billion a quarter. Operating income in the June quarter was $316 million. The company’s debt load, at $21.7 billion, is fairly heavy.

Sprint and Clearwire are facing the challenge of AT&T (T) buying licenses from Aloha in the 700 MHz frequency covering 196 million people in 281 markets, including 72 of the top 100 metropolitan areas and all of the top 10 markets. The FCC is going to auction off more 700 MHz.spectrum in January. Access to this will provide wireless operators the ability to offer better wireless broadband which is tough competition for WiMax.

Sprint and Clearwire can face the competition separately and probably take a severe beating. Or, they can put together one company, It would not be surprising if Intel, Nokia, and Samsung would make strategic investment to help finance building the US WiMax network. Having a single company building instead of two would save hundreds of millions of dollars.

One thing is for certain. Sprint is running out of time.If a new CEO shows up at the end of the year, it may already be too late.

Douglas A. McIntyre

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