Sprint, the third largest mobile operator in the United States, is in talks with a number of wireless device makers such as navigation company Garmin to boost its network capacity leasing business, according to a report.

The report in Tuesday’s edition of The Wall Street Journal said Sprint, which currently leases  capacity on its network to Amazon.com for its electronic book Kindle, is planning to increase its wholesale business.

For Sprint, the business of wholesaling network capacity to independent companies is hardly new. Sprint was one of the early entrants in the ill-fated Mobile Virtual Network Operator (MVNO) business. (Has Disney Killed the MVNO Business?)

MVNOs such as Disney Mobile and ESPN Mobile built businesses on wireless networks such as Sprint’s,  but they struggled to attract enough customers and most of the high-profile efforts collapsed. (Final Bell for Mobile ESPN)

“But times have changed since then. Sprint has a lot of network capacity on both its 3G and WiMAX networks and it is not doing that well in its retail business,” said Alex Besen, president of The Besen Group.

Sprint has been losing subscribers, revenue, and market share in its retail business for the last few years, so the wholesale business seems like an attractive option.

And while most of the largest mobile operators sell their services wholesale, none of them have moved boldly to take ownership of the wholesale segment of the market.

Considering its current predicament in its retail business, Sprint, which has learned a lot of lessons from the failed MVNO business, could take the lead in the wholesale area, Mr. Besen said.

The most important lessons are for Sprint to not compete directly with its leasing customers and to make sure subscription prices are affordable, he said.

The major MVNOs failed because their services were too expensive, Mr. Besen said, which could be blamed in part on the wholesale prices set by Sprint and the other operators.

If the applications are priced attractively, promoted heavily, and discounted liberally, the wholesale business could thrive, he said. Also the new crop of device makers is data-only so they will not compete directly with Sprint’s voice business.

“I think it’s a smart strategy for Sprint. The demand for connectivity and mobile bandwidth will continue to grow and Sprint has carved out a great offering in this area,” said Shahid Khan, senior partner with IBB Consulting.

Sprint has some unique advantages in the wholesale market. It has a lot of spectrum allocated to both its cellular network and to Clearwire’s WiMAX network, in which Sprint is the largest shareholder. (Tech Consortium Bids $14.5B on WiMAX)

So with the right kind of bandwidth management, Sprint should be able to build a fairly large wholesale business, Mr. Besen said.