Sprint and T-Mobile shares plunge after reportedly abandoning merger plans

T-Mobile CEO on music, Amazon and Sprint
T-Mobile CEO on music, Amazon and Sprint

Sprint and T-Mobile may not be getting together after all.

Shares of the two companies plunged in after-hours trading Tuesday after The Wall Street Journal reported Sprint (S) had given up an attempt to acquire its fellow mobile carrier.

The deal would have united the nation's third- and fourth-largest wireless companies into a combined entity with a subscriber total to rival that of industry leaders AT&T (T) and Verizon (VZ).

Such a deal would have drawn a lengthy review from federal antitrust officials, who have the power to nix merger agreements. Sprint cited this regulatory challenge in explaining its decision to abandon the T-Mobile (TMUS) deal, the Journal reported, citing an anonymous source.

Bloomberg, meanwhile, reported late Tuesday that Sprint plans to announce a new CEO to replace current chief executive Dan Hesse.

Representatives for both companies declined to comment.

Sprint now faces the task of charting a new path forward to compete in the U.S. wireless market. Masayoshi Son, CEO of Sprint parent SoftBank, calls the U.S. wireless industry a duopoly, and expressed doubts earlier this year that either Sprint or T-Mobile can compete going forward without joining forces.

T-Mobile, meanwhile, may find another suitor. The company's shares surged last week on news that it had received a $15 billion takeover offer from French telecom company Iliad.

Iliad would be less likely than Sprint to face antitrust challenges given that it has no footprint in the U.S. at present.

CNNMoney Sponsors