If the federal government's succeeds in blocking the $39 billion AT&T merger with T-Mobile the biggest winner could be Overland Park-based Sprint Nextel Group.

The country's third largest wireless carrier has several options open to it if the much talked about merger falls through. For one it could take over AT&T's role in courting T-Mobile.

"If this deal in the end doesn't go through, then there's a pretty good chance that Sprint will end up with T-Mobile," said Timm Bechter, an industry analyst at Waddell & Reed Financial Inc. in Overland Park. "They will pick up that conversation again if this deal is terminated."

Sprint executive Dan Hesse has fought the planned merger of AT&T and T-Mobile. The company's official statement last Wednesday applauded the antitrust lawsuit saying that it would ensure a competitive U.S. wireless industry for consumers.

The Justice Department lawsuit said that allowing the merger to continue would likely mean "higher prices, less product variety and innovation, and poorer quality services" because of "reduced incentives to invest."

Should the merger have pushed though, Sprint would have been a much smaller No.3 wireless company. Sprint has faced stiffer competition from Verizon and AT&T whose bigger operating scale allows them to secure better deals on hardware. Sprints market share of subscribers dropped 13 percent in 2010. The company reported a net loss of $847 million in the second quarter of this year.

Even with the possible AT&T merger blocked Sprint still faces near-term problems. Sprint is upgrading its network which could mean cash flow problems in the near future. However it would eliminate Sprint's biggest problem of having to operate two separate wireless networks.

Sprint could also offer to collaborate with cable companies that control the spectrum.

Charles S. Golvin, a telecom analyst at Forrester Research, thinks that Sprint's best chance for success is to pump up its unlimited data plans as it revamps its network. There is a certain advantage for Sprint to market itself as the smaller David against the other telecom Goliaths.

"We're the little guys, we have to try harder," Golvin said. "That sort of story could work for them."