A report emerging from the United Kingdom could have wide ranging implications on the wireless business in the United States, especially in the Seattle area where Deutsche Telekom's T-Mobile USA unit is based. The Telegraph reports that Deutsche Telekom has hired investment bankers to explore a possible $10.6 billion bid for Sprint Nextel.

The tie up -- which The Telegraph reports could occur in coming weeks -- would bring together the third and fourth largest wireless carriers in the U.S.

T-Mobile has been struggling to hang on to customers as it faces intense competition from Verizon as well as AT&T, which has received a boost as the exclusive provider of the iPhone in the U.S.

T-Mobile's customer churn rate rose to 2.2 percent in the second quarter, while the number of new customers at the carrier also slowed. Sprint Nextel also is losing customers, losing 257,000 net wireless subscribers during the second quarter.

Cnet reports that a merger of T-Mobile and Sprint Nextel would be tough to pull off given the different wireless network technologies used by the companies. T-Mobile operates a GSM network, while Sprint operates on CDMA and Nextel uses iDEN.

Fierce Wireless reports on how analysts are reacting to the news, including Sanford C. Bernstein & Co. analyst Craig Moffett who wrote in a research note that the U.S. wireless industry is "crying out for consolidation."

"A merger would, ironically, benefit Sprint's and T-Mobile's competitors more than it would benefit Sprint and Deutsche Telekom themselves," he wrote.