T-Mobile, Sprint: Huawei shun will help clinch US deals

This article first appeared in The Edge Financial Daily, on December 17, 2018.
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WASHINGTON/NEW YORK: T-Mobile US Inc and Sprint Corp believe their foreign owners’ offer to stop using Huawei Technologies equipment will help with the US clearing their US$26 billion (RM108.94 billion) merger deal, sources said, underscoring the lengths to which Washington has gone to shut out the Chinese company.

Like all major US wireless carriers, T-Mobile and Sprint do not use Huawei equipment, but their majority owners, Germany’s Deutsche Telekom AG and Japan’s SoftBank Group Ltd, respectively, use some Huawei gear in overseas markets.

People familiar with the deal between T-Mobile and Sprint, the third and fourth largest US wireless carriers, said US government officials had been pressuring Deutsche Telekom to stop using Huawei equipment, and the companies believed they had to comply before a US national security panel would let them move forward on their deal.

Both Deutsche Telekom and Softbank were reported last week to be seeking to replace the world’s biggest network equipment maker as vendor. Now, T-Mobile and Sprint expect the US panel, called Committee on Foreign Investment in the US, to approve their deal as early as this week, the sources said.

The sources, however, cautioned that negotiations between the two companies and the US government have not been finalised yet, and any deal could still fall through. They asked not to be identified because the matter is confidential.

Sprint, T-Mobile, Deutsche Telekom, SoftBank and CFIUS declined to comment. Huawei did not respond to a request for comment. The US government and its allies have stepped up pressure on Huawei over concerns that the company is effectively controlled by the Chinese state and its network equipment may contain “back doors” that could enable cyber espionage, something which Huawei denies. — Reuters