Analysts with Cannacord Genuity, the financial services firm, weren't surprised Sprint abandoned its plan to gobble T-Mobile in light of the regulatory opposition to the deal.
Since 2007, two years after Sprint and Nextel combined in what was later considered a failed merger, Sprint has been bleeding losses. But in the latest quarter that ended June 30, the carrier posted a profit of $23 million, its best performance in nearly seven years when excluding certain items from last year. The company serves 54.5 million total subscribers, far below the customer counts of AT&T (116.6 million) and Verizon Wireless (104.6 million retail connections).
"Although far from surprising, we believe Sprint will once again focus on retooling its competitive conditions and remain a standalone entity," wrote Greg Miller, an analyst with Cannacord Genuity, in a research report. "We believe an outside bid for T-Mobile US is far more likely than one for Sprint at this time."
A forthcoming bid for T-Mobile would come at a time when the carrier has been performing extremely well, adding more than 1 million subscribers per quarter in the last several quarters, developing momentum with its popular "uncarrier" strategy that eliminates postpaid contracts.