T-Mobile May Suffer if AT&T Deal Fails

When AT&T agreed to buy T-Mobile USA in March, the deal looked like a happy fate for a company that had been losing customers and facing declining sales. But should the lawsuit filed by the Justice Department kill the proposed merger, some analysts say it could leave T-Mobile in a much worse position than it was before the deal was announced, its competitiveness sapped by months spent in limbo.

“This is a business that is treading water,” said Robin Bienenstock, an analyst at Sanford C. Bernstein & Company who tracks T-Mobile and Deutsche Telekom, its parent company. “They have to go back into the market in the meantime, and they are going to have to figure out a way to build momentum in their core business.” T-Mobile has long staked its reputation on offering low-cost service plans. But in recent months, the company has lost ground to its larger rivals, AT&T, Verizon Wireless and Sprint, which have lured away subscribers with popular devices like the iPhone and the promise of faster networks and services. The company’s position is especially precarious given the evolving state of the wireless industry, which is increasingly focused on customers willing to pay for expensive smartphones and the data plans that go with them. It will be harder for a company that emphasizes lower prices to stay afloat in that market, experts say.