I'm not a fan of Sprint and I don't think they provide a lot of competition in the industry, but...

Sprint hasn't been hemorrhaging customers. Between 2007 and now, Sprint has basically stayed flat at 54M customers in 2007, hitting a low of 48M customers in 2010, peaking at 60M customers in 2016, and back down to 54M customers today. http://tinyurl.com/carriertotals - this hasn't been updated in a while, but it's clear to see that Sprint has just been pretty steadily mediocre.

I think the merger is being fought because it's really hard to introduce a new wireless carrier. There's a limited amount of spectrum and as high-bandwidth applications take root, the barrier to entry increases. There's no only the inertia of customers and the normal barriers that companies have, but the hard barrier of not having spectrum.

Likewise, even when you're doing stellar, it's hard to make a dent in the distance between you and other companies. T-Mobile has been doing amazing things since current management took over in 2013. Still, despite T-Mobile basically getting all the industry growth over the past 6 years, they're a distant third to AT&T and Verizon. If someone were to launch a new carrier, it would likely take a decade or two before it started really making a difference.

It's also hard to say how much, if any, competitive pressure Sprint is putting on the industry. Sprint had been offering a free year of service (a $2,000 value for a family of 4) and had few takers. They've been offering $25/mo unlimited service for life (for a single line) and had few takers despite being less than half the price of competitors. When T-Mobile (re)introduced unlimited, Verizon and AT&T were forced to do the same. When Sprint makes moves, no one pays attention. However, if Sprint weren't there, would prices go up? It's certainly possible.

Similarly, it's unclear how long Sprint can hold on financially. They haven't been doing great and they'll need to make a large 5G investment in the coming years as their debt payments mount. However, Sprint has hung on for a long time under mediocre finances.

I think there's definitely the idea in many people's head that Sprint could team up with someone other than T-Mobile to provide a rejuvenated 4th carrier. However, the economies of scale and debt that Sprint has don't provide a lot of good options. Cable companies are likely to be hesitant to buy what is a losing business with crippling debt. If the deal doesn't go through, Sprint's market cap is likely to shrink and it's unlikely that SoftBank (Sprint's majority owner) would want to sell at that low valuation and it's unlikely that cable companies (or anyone else) would want to offer a premium. That kinda creates an impasse.

I think it's unlikely that Sprint could get a different partner on terms that SoftBank would accept. SoftBank drove a hard bargain and T-Mobile was willing to pay a premium for Sprint because they'd get the economies of scale one gets from 130M customers and one network. Would SoftBank be willing to accept half of what they'd be getting from T-Mobile? Probably not. "Half" might sound extreme, but it's also probably accurate. The deal is probably worth $38B to SoftBank conservatively assuming that the combined company is worth 20% more together than separately. Before the merger talk started back up, Sprint was worth $20B and that's when there was still the possibility of a merger, just no concrete talks. If a merger with T-Mobile is definitively dead, Sprint would probably sink below that - I'd say a 20-30% drop below that seems likely. So, without the T-Mobile merger, Sprint's market value goes so low that I don't see SoftBank being willing to stomach the loss. In fact, SoftBank bought into Sprint at a valuation of $28B. If they sold to anyone other than T-Mobile, they'd have to lock in a substantial loss.

Again, I tend to agree with your position, but I can also see why people really want to believe in a 4th competitive carrier. Losing competition isn't great. Yep, Sprint doesn't really seem competitive, but there is still that hope they might be competitive someday. Maybe someday they'll find a partner that will rescue them, maybe someday they'll find magic technology that will make them better.

"Maybe someday" could be the story of Sprint since the Nextel merger. Maybe someday Sprint will get broad coverage having acquired the low-band spectrum in the Nextel deal. Maybe someday WiMAX will rule the world. Maybe someday LightSquared will give Sprint an amazing LTE network. Maybe someday Sprint will buy Clearwire and use its deep spectrum to create the best experience. Maybe someday SoftBank will make Sprint amazing like their Japanese network. Maybe someday HPUE will magically make their 2.5GHz spectrum better. Maybe someday massive-MIMO will make their LTE network offer gigabit speeds everywhere.

But "maybe someday" still offers hope. While Sprint is independent, there's still hope that wireless could become a true 4-competitor market in the US. Once Sprint is gone, that hope is (mostly) gone.

(Also, Boost is an MVNO on Sprint, but if this deal goes through, it would be an MVNO on T-Mobile. So, any objection to the technology or current network situation isn't really important. The Boost MVNO would be running against T-Mobile's network as customers handsets allow and as customers upgrade.)