Sprint Is Running Out of Breath

The race to the bottom in wireless costs could be a marathon -- something that bodes poorly for Sprint.

Sprint is by far the worst-performing of the national wireless companies this year, having shed 28% of its value. Without a deal to buy T-Mobile US, and perhaps even with one, minority shareholders in Sprint could be in for more pain. The key figure for investors is the change in lucrative postpaid subscribers. From 2013 through the first quarter of this year, Sprint lost 2.5 million postpaid customers. Meanwhile, AT&T gained 2.4 million, Verizon added 4.7 million and even T-Mobile snagged 3.3 million. Ironically, the aggressive pricing that fueled T-Mobile's growth may bolster regulators' case that four companies are better than three.

But Sprint's majority owner SoftBank is desperate to stanch the bleeding, both in customers and earnings, by partnering with T-Mobile. And while Sprint has yet to make a formal offer, it may team up with its rival to buy a block of wireless spectrum. Actually joining the two companies could take more than a year and involve considerable financial risk, though. That includes the cost of arranging bridge financing and possibly a large fee payable to T-Mobile if regulators quash a deal.