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Telstra has abandoned its $60 million pursuit of South Australian ISP Adam Internet, after it faced hurdles from the ACCC.

The deal was initially announced in October, but has been scuttled after failing to receive approval from the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog detailed some concerns with the deal back in January, specifically with regards to its potential impact on the rest of Australia's budget ISPs.

Rival service providers submitted that Telstra would use Adam Internet to corner the budget ISP market, giving it an unfair advantage in both the high-end and budget markets.

In a joint media release issued this morning, Telstra and Adam Internet confirmed the deal would not go ahead, as it had a contractual end date of 30 June this year.

Telstra Chief Customer Officer, Gordon Ballantyne, said Telstra had attempted to address the ACCC's concerns, but gave up trying in the end.

“We are very disappointed by this 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.

Earlier this week Adam Internet founder Greg Hicks was reported as saying that the future of the deal was in the regulator’s hands and that the timeline was on hold.

“It’s business as usual here and our revenue has increased 17% this year,” he said.

The news is not especially surprising as the ACCC has previously declared its position that Telstra is big enough as is.

Last month the ACCC released a damning report into Telstra's non-compliance of its Structural Seperation Undertaking (SSU), saying it placed rival broadband companies at a significant disadvantage.

All eyes will now be on Telstra to see whether it will pursue another budget ISP, or perhaps launch its own spin-off budget brand.

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David Swan

David Swan is a tech journalist from Melbourne and is iTWire's Associate Editor. Having started off as a games reviewer at the age of 14, he now has a degree in Journalism from RMIT (with Honours) and owns basically every gadget under the sun. He also writes for Junkee and Fasterlouder. You can email him at david.swan@itwire.com or follow him at twitter.com/mrdavidswan

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