Telstra proposal to acquire South Australian ISP Adam Internet, announced in October last, has been killed off following concerns raised by the competition watchdog, ACCC.
Telstra yesterday confirmed the deal would now not go ahead.
The ACCC had raised a number of concerns with the acquisition, which Telstra said it had attempted to address, but in the end had not been able to secure approval in time.
iiNet and Optus both made submissions to ACCC seeking to prevent the nation's biggest telco from snapping up South Australia ISP, late last year.
Telstra had proposed to retain the Adam brand, its 90,000 plus customers and run it as a stand-alone subsidiary, but intended to expanding the ISP nationally.
The statement of issues released by the watchdog states:
"The ACCC's preliminary view is that post acquisition, Telstra would have the ability and incentive to utilise its market power to favour Adam over its wholesale customers in the provision of access to its network infrastructure."
Telstra Chief Customer Officer Gordon Ballantyne said the telco was "very disappointed" by the outcome.
"We believe this transaction would have provided real benefit to Australian consumers and would have added new competition into the broadband market," Ballantyne said.
Executive Chairman of Adam Internet Greg Hicks said the company was "disappointed this important condition precedent could not be achieved in a commercially acceptable time frame, and therefore we will no longer be proceeding."