Deutsche Telekom AG (DTEGY)  shares fell sharply in Frankfurt Wednesday amid speculation that the owner of T-Mobile (TMUS - Get Report)  has hit an impasse on merger talks with Japan's SoftBank Group (SFTBY) that would bring its U.S. subsidiary together with rival carrier and Sprint (S - Get Report)  .

Sprint is said to be to be considering walking away from the negotiation table with T-Mobile for the second time in three years, according to reports in the Wall Street Journal. Directors of Sprint's parent company Softbank reported met last week and decided to suspend merger efforts, sources told the newspaper.

Deutsche Telekom shares were down 1.92% in Frankfurt, changing hands at €15.33, extending a three-month loss of around 2%. German markets were closed on Tuesday, meaning this is Deutsche Telekom first response to a possible breakdown in talks.

The U.S.'s No. 3 and No. 4 carriers were in talks about an all-stock deal, but were still discussing ownership ratio.

Deutsche Telekom had insisted on a controlling stake but SoftBank's founder and chairman, Masayoshi Son, was said to be concerned about giving up control, sources told WSJ.

Sprint shares fell by more than 9% on Monday when the reports first emerged, but gained 3.15% on Tuesday to close at $6.54. T-Mobile fell 5.35% Monday, but gained back little ground Tuesday,closing at $59.77.

More of What's Trending on TheStreet: