The UK's largest mobile operator formed with the merger of Orange and T-Mobile, Everything Everywhere (E2), is to drop legal action that threatened government plans to improve UK digital infrastructure.
In August, E2 threatened legal action over the government's proposed auction of next generation wireless spectrum, aimed at ensuring all mobile operators have sufficient radio spectrum to meet consumer demand for mobile data services.
E2 had objected that the government's proposed spectrum legislation did not cap the amount of low-frequency airwaves one operator could own because of fears that most of it would end up in the hands of rivals Vodafone and O2.
Control of this spectrum will give mobile operators a cost-effective way of extending mobile broadband to rural areas, although the government claims it is making enough public funds available to provide high-speed, fixed-line broadband in rural areas.
Communications Minister Ed Vaizey welcomed the E2 decision, saying the government was now ready to support major improvements to the UK's broadband networks, according to the Financial Times.
Tom Alexander, E2 chief executive, agreed to drop the legal action after intensive discussions with the government, the paper said.
Vaizey said he hoped the spectrum legislation would be approved by parliament by the end of the month.