Earlier today, Nikkei Asian Review published a report that merger talks between Sprint and T-Mobile are over. According to the story, Sprint owner SoftBank was unwilling to relinquish control of the merged company to Deutsche Telekom, T-Mobile’s owner.

According to the instant replay, at least, that move may not have been wise. Sprint’s shares are down 9% today following news of the announcement.

Sprint shares were down to $6.34 by close, down from over $7 this morning. T-Mobile shares were down 5% on the day.

Wall Street has generally been enthusiastic about the proposition of a merger. Combining Sprint and T-Mobile would result in a network with as many subscribers as AT&T and Verizon, and a formidable spectrum holding. That would give the company enough money, subscribers, and network coverage to significantly raise prices — good for the bottom line, bad for consumers.

That isn’t just idle speculation: AT&T and Verizon shares are down sharply, 1.3% and 2% respectively, following the news. Conventional wisdom would say that a T-Mobile/Sprint merger would be bad for AT&T and Verizon, as it creates a third network that’s big enough to compete. But as investors seem to understand, a merger would have the opposite effect, removing downwards price pressure and competition from the market, which would greatly benefit AT&T and Verizon. That’s why shares of those two are down, now that the merger is seemingly dead.

Chris Mills has loved tinkering with technology ever since he worked out how to defeat the parental controls on his parents' internet. He's blogged his way through Apple events and SpaceX launches ever since, and still keeps a bizarre fondness for the Palm Pre.