FRANKFURT (Reuters) - Deutsche Telekom shares dropped in early Monday trading after the collapse of the merger of its T-Mobile US unit with Sprint Corp, which would have created a strong No.3 player on the U.S. market.

FILE PHOTO: Deutsche Telekom logo is seen during preparations at the CeBit computer fair, which will open its doors to the public on March 20, at the fairground in Hanover, Germany, March 19, 2017. REUTERS/Fabian Bimmer/File Photo

The evaporation of synergies that analysts had estimated at more than Sprint’s $27 billion market capitalization triggered several broker downgrades and sent Telekom’s stock as much as 3.6 percent lower.

But some praised Telekom for exercising discipline in not agreeing to pay a significant premium for heavily-indebted Sprint and insisting on control that would have allowed it to consolidate the merged entity into its results.

Deutsche Telekom CEO Tim Hoettges said T-Mobile, in which the German company owns a 64 percent stake, would press ahead with a strategy that has added more than a million customers for 18 consecutive quarters.

“Frankly, T-Mobile US is well enough positioned to succeed on its own without Sprint,” said Dhananjay Mirchandani, a telecoms analyst at Bernstein Research in London.

“As for Deutsche Telekom, after the shares take a near term knock, I don’t see how this really alters strategy,” Mirchandani added. “So back to boring business-as-usual.”

The slide in Telekom shares was similar to the Tokyo market falls for Sprint, majority owner Softbank Group, whose boss Masayoshi Son, sources said, had got cold feet over ceding control.

SoftBank said on Sunday it would raise its stake in Sprint to under 85 percent from 83 percent in a show of commitment to the No.4 U.S. wireless carrier which, while managing to grow its customer base, is weighed down with $38 billion of debt.

T-Mobile’s importance as a driver of growth - which could have been enhanced by the Sprint deal - is likely to be underscored when Deutsche Telekom reports results this week. T-Mobile has already reported third-quarter revenues that topped $10 billion for the first time, up 8 percent.

The picture for Deutsche Telekom group on Thursday is likely to be different, with analysts on average forecasting group revenues of 18.4 billion euros ($21.4 billion) - a year-on-year gain of just 1.6 percent.

That would reflect barely positive growth in Telekom’s crowded and heavily regulated home market, where sales rose just 0.4 percent in the first half, and at its European holdings that were ahead by 1.5 percent.

Analysts at Berenberg bank said Deutsche Telekom management deserved some credit for not doing the deal for its own sake. Still, they lowered their share-price target to 14 euros from 15.80 and restated their ‘hold’ rating on the stock.

Some investors wonder whether the best years may now be behind T-Mobile, whose shares have risen nine-fold from the low they hit after the global financial crisis to a peak of $68 in June.

“I’d just love them to sell it,” Ben Lofthouse, a fund manager at the Henderson International Income Trust, said last week as reports surfaced that the T-Mobile-Sprint talks were in trouble.

At T-Mobile’s latest share price, Deutsche Telekom’s 64 percent stake would be worth $31 billion.

“There’s a tendency to run things for ever, sometimes, and then you end up selling at the wrong times,” added Lofthouse, whose fund holds Deutsche Telekom shares.

Together, T-Mobile and Sprint would have had about 130 million customers, putting a merged entity a close third in the United States behind market leaders AT&T and Verizon. Alone, T-Mobile has 70.7 million customers.