Could the Failed T-Mobile-Sprint Merger Be Good for Wireless Carriers?

When it seemed like T-Mobile (NASDAQ: TMUS) and Sprint (NYSE: S) were on course for a successful merger agreement last month, I wrote that Verizon Communications (NYSE: VZ) and AT&T (NYSE: T) would be two of the biggest beneficiaries if a deal went through. Fewer competitors means more profits to go around for the players that remain.

But with Sprint's dwindling hopes of a buyer swooping in and snatching it up, it may be forced to refocus on its bottom line instead of attracting new customers at any cost. A shift in focus would benefit competing carriers, including its former suitor, T-Mobile. That's the crux of the argument posed by analyst Craig Moffett, who writes, "All players will benefit if Sprint, as seems likely, adopts a less promotional pricing posture as they attempt to balance the competing priorities of debt service and network reinvestment."

Indeed, there's no longer a clear buyer for Sprint, and the company is being forced to become self-sustaining. Sprint could struggle to differentiate its product and attract new subscribers without its extremely low pricing. That leaves more subscribers on the table for T-Mobile, Verizon, and AT&T. 

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Source: Fool.com