AT&T abandons $39bn T-Mobile bid

The company ditched its 10-month long pursuit of Deutsche Telekom’s US business Monday after facing opposition from the Department of Justice and possible resistance from the Federal Communications Commission.

The mobile phone giant said in a statement that it would take a $4bn accounting charge for dropping the bid. AT&T will also enter a roaming agreement with Deutsche Telekom, and transfer the rights to spectrum it doesn't need for the rollout of its next-generation "4G" network.

AT&T added that the actions of the US government to block the deal did not change the challenges of the wireless phone industry, which it says required more airwaves, known as spectrum, to expand.

"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the US wireless industry," AT&T said in a statement.

Without it, "customers will be harmed and needed investment will be stifled," it added.

The decision came after the US Department of Justice sued to prevent the takeover in August, saying it would further concentrate an industry already in the hands of just a few providers.

A successful deal would have propelled AT&T past Verizon Wireless into first place in the US wireless market. T-Mobile is currently the fourth-largest.

Last month, the companies withdrew their application to the Federal Communications Commission after its chairman also opposed the deal.

Shares in AT&T closed down 0.4pc at $27.74 in New York.