Sprint drops bid for T-Mobile, reports say

Sprint will no longer make a bid for its competitor T-Mobile, the Wall Street Journal reported Tuesday.

The nation's third largest carrier is abandoning its plans to buy T-Mobile, a deal rumored since last year. Additionally, Recode has reported that Sprint will replace CEO Dan Hesse as soon as Wednesday, with board member Marcelo Claure. Claure is CEO of wireless distribution service Brightstar.

The two companies, ranked No. 3 and No. 4 in the US wireless market, decided the deal wouldn't pass muster with regulatory agencies, unnamed sources told the Journal. When reached by CNET, Sprint declined to comment. T-Mobile did not immediately respond to a request for comment.

The news comes shortly after reports that T-Mobile's talks with French telecommunications provider Iliad have fallen through because T-Mobile thought Iliad's reported $15 billion offer for a controlling stake in the carrier was too low. Sprint's offer had reportedly reached $30 billion.

Sprint's investors were not happy with the reported development. The stock fell more than 16 percent to $6.11 in after-hours trading, shortly after the news.

T-Mobile's current majority owner Deutsche Telekom, has been trying to offload the company to focus on its core business in Europe. A deal between Sprint and T-Mobile would have ideally given the two companies more leverage to compete with Verizon and AT&T, both of which are much larger.

While investors may have liked the idea, the deal would have faced a tough regulatory review. In the past, regulators have said they want four competitors in the wireless market. This was made clear in 2011 when regulators said they wouldn't approve of AT&T's $39 billion bidfor T-Mobile.

T-Mobile saw some major growth in its last quarter, thanks to aggressive marketing campaigns. The company's customer base surprised 50 million.

Updated, 5:59 p.m. PT.: Added report that Sprint board member Marcelo Claure will take over as CEO.