T-Mobile Will Leave Sprint in the Dust

While AT&T (T) and Verizon (VZ) slug it out for first place, Sprint (S) is vying against T-Mobile for the last place among the top four wireless telcos.

Sprint was nearly undone by the Nextel merger, which took a toll on the company, its subscribers and its profits last year. This year, Sprint's recovery hopes are pinned largely on Palm's (PALM) Pre, the hotly anticipated touchscreen smartphone.

No. 4 player Deutsche Telekom's (DT) T-Mobile USA has been the sector sleeper steadily gaining customers through inexpensive calling plans and a few fun phones.

T-Mobile's modest success is due partly to Research In Motion's (RIMM) popular BlackBerry phones. In addition to the BlackBerry Flip Pearl and the Curve, T-Mobile is expected to get another 3G addition to its lineup, sort of a sleeker version of the Curve and Bold.

T-Mobile has also benefited from Google's (GOOG) Android-powered HTC G1 phone. And, if reports are true, the second version of the phone, dubbed Magic, will land later this year.

The other potential product hit for T-Mobile this year is the Samsung Memoir. This eight-megapixel camera is also a touchscreen phone that can surf the Web.

T-Mobile is one of the fastest growing-business units of Deutsche Telekom's empire.

For Sprint investors, the races with T-Mobile and even the Palm Pre are secondary to possible takeover prospects. Spain's mobile giant Telefonica (TEL) is preparing to make a big impression in the U.S. As TheStreet.com reported Friday, Telefonica is looking to hire a publicity agent to handle its image in the U.S. and U.K.