NEW YORK (TheStreet) -- Shares of Windstream (WIN) were rising 8.26% to $7.34 on heavy trading volume late Friday morning as the company is in advanced discussions to merge with telecom company EarthLink (ELNK) in an all-stock deal, Reuters reports, citing sources.

Shares of EarthLink were soaring 15.50% to $6.26 late this morning.

The deal, in which Windstream would own a little more than half of the combined company, may be announced as early as next week, the sources added.

The merger would position the two companies to better compete with rivals, according to Reuters. But the deal is not final and discussions could fall apart, the sources noted.

Little Rock, AR-based Windstream is a provider of phone and Internet services.

More than 2.51 million of Windstream's shares changed hands so far today vs. its average 30-day volume of 1.70 million shares.

Separately, Windstream declared a quarterly dividend of 15 cents per share today. The dividend is payable on January 17 to stockholders of record as of December 30.