AT&T and DT withdraw merger applications

Deutsche Telekom and AT&T have withdrawn their merger applications to US telecoms regulators, but say they still intend to see T-Mobile USA sold to AT&T.

The move on Wednesday came a day after Federal Communications Commission (FCC) chairman Julius Genachowski said the $39bn (£25bn) deal was not in the public interest, as it would create a greater concentration in the US mobile market than had ever been seen before.

The companies said they were withdrawing their applications to the FCC, but would press on with the merger plans nonetheless. AT&T and Deutsche Telekom said they would focus their efforts on overcoming another obstacle: the Department of Justice (DoJ), which sued in August to block the deal on competition grounds.

The withdrawal of applications was designed to "consolidate [the companies'] strength and to focus their continuing efforts on obtaining antitrust clearance for the transaction from the Department of Justice", the statement read.

"As soon as practical, Deutsche Telekom and AT&T intend to seek the necessary FCC approval," the companies added.

The statement also revealed that AT&T is to recognise a $4bn pretax accounting charge in the fourth quarter "to reflect the potential break-up fees due to Deutsche Telekom in the event that the transaction does not receive regulatory approval".