Sprint Nextel’s stock soared 11 percent before the market opened on a British newspaper report that T Mobile parent Deutsche Telekom had appointed Deutsche Bank to advise on a possible run at Sprint, valuing the U.S. cellular carrier at $11 billion.

Sprint certainly is a logical target for any company looking to boost its position in the very busy U.S. mobile market. It announced a large goodwill write-off in February 2008

And Deutsche Telekom is on the make. It signed a deal with France Telecom to combine the companies’ British mobile phone businesses — T-Mobile UK and Orange — last week.

A Sprint deal would make T-Mobile the top U.S. mobile company, but it would cost a bundle … and that’s just the up-front funding. Combining Sprint’s CDMA and T Mobile’s GSM technologies would take technological wizardry no less daunting than the magic the German carrier might have to employ in Washington to ensure a deal clears antitrust and other regulatory hurdles.

So while the hype could last through the day, any near-term excitement about a mega mobile merger could well be tempered by the time your next phone bill arrives.

Sprint Nextel Corp appears to be considering several deals, including a possible spinoff of its Nextel business, a WiMax joint venture with Clearwire Corp, or a takeover by Deutsche Telekom.

With the company scheduled to report earnings on May 12, investors hope something — anything — will happen to shake up the struggling wireless company. But analysts aren’t so sure that any of those transactions would create value for shareholders, especially considering the company’s less-than-stellar acquisition track record and its struggles with subscriber losses and network problems.

“While restructuring is a possibility we see significant hurdles to completing value added transactions,” said Morgan Stanley analyst Simon Flannery. “There are multiple impediments to value creating transactions including technological, regulatory, and financial barriers.”

Spinning off Nextel would unravel the $35 billion acquisition of that company in 2005. At the time of the merger, the combined company had a market capitalization of $70 billion, compared with just $23 billion in market cap today. CEO Dan Hesse said in April he was not actively looking for a buyer for the Nextel assets, but would evaluate any offers. But would it be feasible?

Goldman Sachs analysts had this to say in a research report:

A deeper dive highlights the complexity: (1) credit markets are effectively still closed, and uncertainty
around cash flow projections at Nextel further limits funding capabilities;
(2) Legal risks are extremely high – involving FCC challenges around the
Nextel spectrum swap, as well as probably bondholder and shareholder
litigation; (3) untangling the Sprint Nextel integration process would be a
huge challenge, with Sprint executives recently highlighting the difficulty.”

Cowen & Co. analyst Tom Watts was more upbeat: “(T)he likelihood of a transaction is high. We expect at least one of Sprint’s three potential deals to be announced over the next few weeks, potentially as early as May 12.”

Watts said the most likely scenario would be a combination with Clearwire, but the other two options are also possible this year, with better odds for a Nextel sale than a Deutsche Telekom tie-up.