If the Justice Department succeeds in blocking the $39 billion merger of AT&T and T-Mobile, the deepest sighs of relief may well come from the executives at Sprint Nextel, the country’s third-largest wireless carrier. Nevertheless, Sprint would face the same daunting problems endemic to the wireless industry if the merger were thwarted, industry analysts say. “It essentially maintains the status quo, which, given the results of Sprint over the last couple of years, is not the best place to be,” said Christopher King, an analyst with Stifel Nicolaus. Mr. King says that Sprint has arguably already lost to Verizon and AT&T.
Sprint itself has acknowledged the difficulties it faces when competing against companies whose scale will allow them to secure better deals on hardware. The company has also argued that the amount of spectrum that a combined AT&T and T-Mobile would control would be anticompetitive. Other analysts are more optimistic about Sprint’s chances, as the company appears to be stemming the loss of subscribers after several years of serious erosion. Even so, its market share of subscribers on contracts dropped to 13 percent in 2010, down from 17 percent in 2008, according to Barclays Capital.
