AT&T: Forget T-Mobile Merger

AT&T Inc. said today that it is ending its $39 billion bid to buy T-Mobile USA after facing fierce government objections. The cell phone giant said that the actions of the US government to block the deal do not change the challenges of the wireless phone industry, which it says requires more airwaves, known as spectrum, to expand. The deal would have solved that problem for a time, and without it, "customers will be harmed and needed investment will be stifled," AT&T said in a statement.

AT&T called on the government to quickly approve its purchase of unused spectrum from Qualcomm Inc. and come up with legislation to meet the nation's long-term needs. AT&T's purchase of T-Mobile from Deutsche Telekom of Germany would have made it the largest cell phone company in the US. T-Mobile is currently the fourth-largest. AT&T now faces paying Deutsche Telekom $3 billion in cash over the merger blocked by the FCC. (More AT&T stories.)