UPDATE 1-Sprint weighs rival bid for MetroPCS-sources

* Sprint may wait until after T-Mobile USA/MetroPCS deal-sources

* Sprint already balked at buying MetroPCS-sources * Sprint shares off 4 pct, MetroPCS shares down 2.1 pct

(Adds sources comment, share price update)

NEW YORK, Oct 4 (Reuters) - Sprint Nextel Corp is considering making a rival bid for MetroPCS Communications Inc , which agreed on Wednesday to a merger with Deutsche Telekom AG's T-Mobile USA, according to sources familiar with the situation.

Sprint Nextel could also wait until the MetroPCS-T-Mobile deal is complete before making a move, one of the sources said on Thursday.

Right now Sprint is deciding whether it needs to take its battle public with Deutsche Telekom or wait until T-Mobile USA becomes a listed company once it completes its merger with MetroPCS, the sources said. Sprint, the No. 3 U.S. wireless carrier, declined to comment.

In February, Sprint came close to buying MetroPCS, but backed out at the last minute.

Sprint's board had rejected the $8 billion MetroPCS deal, which would have included debt, just hours before the companies were set to make announcement, sources had told Reuters previously.

At the time, the board did not want Sprint to spend billions of dollars on a deal when it needed the resources for a costly network upgrade it is undertaking, sources said.

Sprint is spending billions of dollars to increase its wireless data speeds to catch up with bigger rivals AT&T Inc

and Verizon Wireless .

The sources said a Sprint/MetroPCS combination would have generated savings of $8 billion to $9 billion, much greater than the synergies expected from the T-Mobile USA and MetroPCS deal. Those companies said on Wednesday that the deal could generate savings of $6 billion to $7 billion on a net present value basis.

MetroPCS shares were down 2.1 percent at $11.98 in afternoon trading on the New York Stock Exchange, where Sprint shares were off 4 percent at $4.99.

(Reporting By Nadia Damouni, Alexander Huebner and Sinead Carew; Editing by Paritosh Bansal, Carol Bishopric and Lisa Von Ahn)

((paritosh.bansal@thomsonreuters.com)(+1 646 223 6113)(Reuters Messaging: paritosh.bansal.thomsonreuters.com@reuters.net))