Merger talks between Sprint Corp and T-Mobile US are understood to have broken down for the second time in three years.
The deal, which would have combined the third and fourth largest US mobile operators in terms of subscribers, could have meant less intense competition for market leaders Verizon and AT&T.
The Wall Street Journal reported that bosses at Sprint parent SoftBank had decided to suspend the merger talks.
SoftBank's founder and chairman, Masayoshi Son, appears unwilling to cede control.
A combined US company was expected to have come under the overall control of T-Mobile's parent Deutsche Telekom through an all-stock deal.
Shares in Deutsche Telekom were trading nearly 4% lower this morning. Likewise, SoftBank was down by nearly 5% in the Japanese trading session.