Since 2011, Sprint (NYSE:S) has climbed from a price of just above $2 to its current $8.75 a share. The company has thrived by striking a deal with Apple (NASDAQ:AAPL) for the iPhone and offering an unlimited service, giving it an edge over the likes of T-Mobile (NASDAQ:TMUS) and AT&T (NYSE:T). But after such large gains, and with a changing landscape, does Sprint still have an investment edge?

A look back at history
If we look back at Sprint in 2011, it had falling subscribers, declining revenues, and a rising debt-to-assets ratio. Essentially, it was more primed for bankruptcy than a turnaround.

Also, the company had no answer for the iPhone, a product that, at the time, was nearly doubling in year-over-year unit sales as the hottest phone in the country. But with a $20 billion deal to carry Apple products, it began to see a boost in subscribers.

It also had an advantage with its service. Apple iPhone users are known to consume more data, and Sprint was the only carrier that offered an unlimited voice and data plan. Combined, the outcome made for massive stock gains and eventually a nearly 80% stake by telecom giant Softbank.

Has Sprint lost its edge?
Here's the kicker: Sprint may be losing its edge. Both AT&T and Verizon have since released more attractive plans, including bundles, and pay-as-you-go programs. This has posed as a major threat, and more importantly, the iPhone is no longer providing the spark it once did.

In Apple's last quarter, iPhone unit sales increased just 6.7% globally, far short of the near 100% growth it was producing in the year before Sprint's deal. While more than 55% of Apple's revenue still comes from the iPhone, the company has now shifted much of its focus away from the saturated Americas, and into China, where it owns a much smaller market share in smartphones, at less than 10%.

Apple's initiatives in China, including its deal with China Mobile, mean that much or most of its year-over-year growth comes outside North America. This means that the roughly 2 million added subscribers Sprint has added since the Apple deal may have reached a peak.

The one wild card
With service providers offering more competitive packages and the iPhone no longer the growth driver it had been, Sprint really has lost its investment edge.

The one wildcard might be T-Mobile.

It's well-documented that Sprint and Softbank are trying vigorously to acquire T-Mobile, as its no-contract plans and "un-carrier 4.0" initiative to attract the competition's subscribers have given the company a recent boost in subs.

Also, T-Mobile earns an industry-low $52 in average revenue per subscriber, which is one reason AT&T tried so hard to acquire it a couple years back. Sprint earns $63 per post-paid subscriber, which is high, and has very little room for growth.

While we can clearly see why Sprint would want to acquire T-Mobile -- T-Mobile's download speeds are also double that of Sprint -- the bigger question is whether regulators like the FCC will ever allow it. The FCC already shot down AT&T's attempted acquisition of T-Mobile, citing that it would hurt the free market. A Sprint and T-Mobile merger would combine the third- and fourth-largest nationwide carriers, but in addition, it would put two valuable spectrums and networks in the hands of a foreign company. A T-Mobile acquisition is a long shot, but important for Sprint's days of stock gains to continue.

Final thoughts
In spite of Sprint's large gains, the company still operates with more than $30 billion in debt, and a near breakeven operating margin of 0.26%. T-Mobile would improve the fundamentals of Sprint, as a company with positive operating margins of 4.7% and double-digit revenue growth.

The problem is that Sprint is unlikely to acquire T-Mobile, and given large losses within the telecom space, there are far better investment options. AT&T trades at just 1.3 times sales and 12 times next year's earnings with a dividend yield of 5.6%. In contrast, Sprint trades at one times sales, with no dividend. The slight premium for well-established peers -- and the problems that Sprint faces -- provides reason to be wary.

Simply put: Sprint has lost its edge, and it's unknown if the T-Mobile catalyst can become a reality.

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Brian Nichols owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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