"We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record," said T-Mobile Chief Executive John Legere in a statement.
The collapse of the talks is a blow to Sprint Chairman Masayoshi Son, who has repeatedly sought — without success — to meld his carrier with T-Mobile.
Many analysts predicted that T-Mobile would take over Sprint, turning around the beleaguered company and using the combined firm's scale to go after Verizon and AT&T, the nation's two dominant wireless carriers. But Wall Street reports earlier this week highlighted disagreement between the two companies over how much the deal should be worth.
Sprint now faces a tougher road ahead as it must confront its years of neglecting its network infrastructure, analysts say.
"We are not bullish on the operational turn-around," said Jonathan Chaplin, an industry analyst at New Street Research, in a note Monday. "At least not without a significant investment in the network, which Sprint has been unwilling to make until now."
A potential Sprint/T-Mobile tie-up would have been dogged by regulatory concerns. Since 2011, federal officials have signaled that they believe having four nationwide wireless providers, not three, will best preserve competition in the industry.
As recently as last month, officials at the Justice Department who would have been charged with overseeing a Sprint/T-Mobile merger proposal were said to have been skeptical of the plan.
Both AT&T and Sprint have sought to merge with T-Mobile in the past. But beginning in 2013, T-Mobile launched a series of initiatives that transformed the wireless business. Its "Un-carrier" program promised to do away with traditional contracts and early termination fees. T-Mobile then followed up by introducing free international roaming and other perks.
The moves kicked off an ongoing period of growth for the company, seemingly validating regulators’ argument for a four-player market. Last month, T-Mobile announced that it had added 595,000 subscribers between July and September, beating its other rivals in what it said was the 15th straight quarter of industry-leading expansion.
Sprint, meanwhile, has been a straggler, ceding its position as third-largest carrier in 2015 to T-Mobile. Despite controlling a considerable swath of commercial spectrum — the invisible airwaves required to carry cellphone signals — Sprint’s network is considered the weakest of the bunch. Analysts had pointed to the costs of integrating the two networks as one of several factors that could make the deal less attractive.
Sprint chief executive Marcelo Claure said Saturday that in light of the setback, his company will look to corporate partnerships as a way forward.
"As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries," said Claure in a statement. "We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”
A T-Mobile/Sprint deal would also have come at a politically sensitive time as President Trump has aggressively promoted an "America First" agenda. A Sprint/T-Mobile deal, according to analysts, would have involved the slashing of tens of thousands of retail jobs as the companies consolidated their brick-and-mortar footprints.
The two wireless carriers are foreign-owned; T-Mobile by German communications giant, Deutsche Telekom, and Sprint by Son and his enormous Japanese conglomerate, Softbank. Analysts had said that although regulators typically focus solely on the economics of a proposed deal, blocking it could have given Trump a rhetorical victory.