AT&T officially drops bid for T-Mobile

AT&T Inc. will hang up the phone on its embattled bid to take over T-Mobile USA for $39 billion.

AT&T on Monday officially called off the deal, which has hit a series of state and federal roadblocks. AT&T cited the opposition from the Department of Justice and the Federal Communications Commission, which rejected the deal on the grounds that it would create a less competitive wireless industry and potentially lead to higher prices for consumers.

But AT&T said the acquisition would have helped the wireless industry, and consumers, by allowing the company to continue building out its network and avoiding what it sees as a coming shortage of wireless airwaves, or spectrum, that companies believe is threatening the industry.

"The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage," the company said in a statement. "In the absence of such steps, customers will be harmed and needed investment will be stifled."

The deal's end comes after an uptick in regulatory and legal action against the acquisition.

AT&T said it would take a $4-billion pretax charge as part of its breakup fee to T-Mobile.

Late last month, AT&T withdrew a crucial clearance application from the FCC, and soon after, the Justice Department argued its case to block the deal on antitrust grounds was no longer necessary, as the deal could only go through with FCC approval.