Pundits are obsessed with the monster deal between two of the top four cell providers in the United States. Sprint (NYSE:S) purportedly wants to buy T-Mobile US (NASDAQ:TMUS) for about $40 per share. T-Mobile's stock is priced at about $33, so investors don't have much confidence in the deal going through. Financing needs to be arranged, and enormous regulatory decisions need to be made. Should U.S. regulators allow the top four to turn into three? More importantly for you, is T-Mobile a decent investment at this time?

Growth of T-Mobile

T-Mobile has it made, except for the minor issue of having no profits. The company is quickly gaining subscribers, with a net addition of 2.4 million subscribers in the first quarter. That is compared to Sprint which lost 383,000 in its first quarter. T-Mobile has netted over 1 million subscribers each quarter for the past four quarters, which is far better than the others in the top four (including Verizon and AT&T.)

One of the reasons for the customer acquisition is that T-Mobile isn't afraid to innovate. The company is moving away from contracts and creating "uncarrier" plans. On the T-Mobile website, the company makes its position obvious: "Don't play by the rules. Break them." In an industry that is the brunt of millions of complaints, customers are very attracted to a different style of provider. A question for Sprint, if the deal is successful, is whether this innovation and culture will carry on or if the Sprint culture will take over.

Other aspects that T-Mobile has going for it is its data speeds, pricing structure, and number of devices available. T-Mobile has the fastest data speeds out of the top four, according to Opensignals. Its potential acquirer was ranked the lowest out of the top four for average data speeds. Pricing depends on the individual customer, but reviews state that T-Mobile and Sprint have lower prices overall than Verizon and AT&T. Devices available at T-Mobile are excellent as well. The company offers Apple's iPhone 5c/5s and Samsung's Galaxy S5, which are currently the hottest phones on the market.

T-Mobile generally has lower coverage than Verizon and AT&T. This is an area that a merger with Sprint could really help. Having the coverage of the two companies combined could make the service much more valuable for customers.

The price for growth

Unfortunately, T-Mobile is losing money. EBITDA for the first quarter was $1.03 billion and $4.64 billion for the past twelve months , but the company had a loss of $151 million in the quarter. For comparison, the company had a profit of $107 million in the first quarter of 2013. Management basically blamed this on the cost of growth. On the financials, expenses across the board have increased considerably along with revenue. Management seems to be OK with sacrificing earnings today to pick up market share.

If we value T-Mobile based on the EBITDA today, the company looks expensive. T-Mobile and Sprint trade at about 5.5 times EBITDA where Verizon and AT&T trade at about 4 times EBITDA. Plus, the two bigger companies, Verizon and AT&T, have less debt relative to market value and they are profitable companies. Of course, growth potential is the big reason for T-Mobile`s higher valuation.

What this all means

Out of the top four telecoms, Sprint appears the weakest as an investment unless you believe that the T-Mobile deal will go through and that the combination will create massive synergies. Sprint is not profitable, it is the worst in terms of growth, and the valuation is pricey compared to AT&T and Verizon.

T-Mobile, on the other hand, has the potential to be a good investment. However, if the deal doesn't go through, T-Mobile's stock price could drop as a result.

In conclusion

T-Mobile needs to continue taking market share, building revenues, and eventually lowering costs to become profitable. If this happens, T-Mobile could be a strong third place telecom in the next three to five years. At its current price, however, T-Mobile is likely too expensive given all of the things that the company must do successfully to reach that position. Perhaps waiting for the yet unannounced deal to potentially fall through is the best choice.