Marking the strongest indication thus far that AT&T's $39-billion T-Mobile acquisition may fall through, a Sunday report in the Wall Street Journal (WSJ) has revealed that AT&T has gone cold on talks pertaining to asset sales for getting the merger approved by the regulators.

It has earlier been disclosed by the people familiar with the proceedings that, with the Department of Justice (DOJ) filing a lawsuit to block the deal on antitrust grounds in August, AT&T and T-Mobile parent Deutsche Telekom were making attempts to allay the government's concerns that the proposed merger will affect competition.

The sources `in the know' had revealed that AT&T and Deutsche Telekom were trying to work out the sale of primarily T-Mobile assets to other wireless carriers.

The two companies had been involved in serious talks for divesting assets worth over 30 percent of the merger's value to Leap Wireless International. In addition, among some of the other reported potential buyers for T-Mobile assets were satellite-TV provider Dish Network, cellular operator MetroPCS Communications, and probably even a few overseas buyers.

However, reports of AT&T and Deutsche's seeming retreat from the merger have been making rounds of late, especially after the two companies decided to put their court fight with the DOJ on hold last week, saying that they would consider "whether and how to revise our current transaction."