AT&T Inc is expected to soon present a proposed solution to U.S. antitrust regulators to salvage its planned $39 billion acquisition of smaller rival T-Mobile USA, according to people close to the matter.

Even as the No. 2 U.S. wireless service provider gears up for a lengthy court battle against the Justice Department, AT&T is prepared to make concessions to address concerns that the T-Mobile deal is anti-competitive and could cause wireless prices to rise.

This two-track plan will allow AT&T to try to find a settlement before the lawsuit reaches the court.

AT&T is pretty determined that they can find a solution, and they are pretty confident, one of the sources said, requesting anonymity as the talks are private.

The U.S. government on Wednesday sued to block AT&T's purchase of T-Mobile USA, a deal that would vault the combined company above Verizon Wireless as the No. 1 player in the United States.

If AT&T fails to defeat the lawsuit, it would have to pay T-Mobile parent Deutsche Telekom an estimated $6 billion in cash and other assets as part of the original deal.

Details of AT&T's proposed settlement were not available, but it is expected to include pledges to maintain T-Mobile's relatively cheap mobile subscription plans, and asset sales.

AT&T may have to sell up to 25 percent of T-Mobile's business, including airwaves and customers, two sources said, to address the government's concern that just three companies would control 90 percent of the U.S. wireless market if the merger goes through.

Bob Doyle, a former antitrust enforcer now in private practice, said it would be difficult for AT&T to reach a settlement with the Justice Department as there would have to be divestitures on both the national and regional level.