The South Korean tech giant stated that its mobile communications division will no longer produce or sell phones starting July 31st, citing its long crisis and fierce competition in the industry, the Yonhap news agency reported.

The decision came two months after the firm indicated that its mobile communications division was open to any possibility for its future operations.

LG, once the world’s third-largest cell phone seller, held negotiations with Vietnam’s Vingroup and Germany’s Volkswagen; however, they failed, according to industry observers.

The company explained that its exit from the mobile business will lead to a decline in the company’s revenues in the short term, but will improve its financial condition and management efficiency in the long run.

LG said it will produce mobile phones until the end of May to satisfy existing customer orders and promised to provide sufficient after-sales services to equipment owners even after closing their business in that area.

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