AT&T has walked away from plans to buy the rival T-Mobile network in the USA following huge opposition from the US government and industry regulators.
The planned $39 billion acquisition, which would have created a super-network, has been under threat since AT&T and T-Mobile announced their intent to merge in March 2011.
Now, following an array of roadblocks with regulators claiming the deal would be bad for the marketplace, both companies have now thrown in the towel.
AT&T will now be forced to pay T-Mobile's parent company Deutsche Telekom a pre-agreed break-up fee of $4bn, while the two companies have entered into a mobile roaming agreement.
Mounting need for more spectrum
AT&T has released a statement claiming that the FCC's decision to stifle the merger does nothing to solve the US industry's chief problem, which is a lack of mobile spectrum.
It read: "The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately.
"The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled."
The news will relieve rival networks Verizon and Sprint, both of whom were threatened by proposed deal. Sprint's shares went up almost 7 points in after hours trading on Monday.
Via: Forbes
