clock menu more-arrow no yes mobile

Filed under:

Sprint and SoftBank promise not to use Chinese networking equipment, says lawmaker

New, 27 comments
son hesse softbank sprint stock 1020
son hesse softbank sprint stock 1020

As Sprint's proposed buyout by Japanese carrier SoftBank rumbles forward, it looks like the usual regulatory suspects like the DOJ and FCC aren't the only agencies with concerns. The US Congress is also getting involved, yesterday letting it be known through the WSJ's sources that it had serious concerns that the new Sprint would use equipment manufactured in China by Huawei or ZTE to build out its network. Fears that the security of such equipment could be suspect have been commonplace and pervasive, and it looks like Sprint and SoftBank are taking them seriously.

The chairman of the House intelligence committee, Mike Rogers of Michigan, said today that he received a promise from both companies to not use equipment from China and that they would replace Huawei products already in use by Clearwire. "I am pleased with their mitigation plans, but will continue to look for opportunities to improve the government’s existing authorities to thoroughly review all the national security aspects of proposed transactions," Rogers said.

If the intersection of a Japanese carrier, a US carrier, the FCC, the DOJ, Congress, and fears of secret Chinese surveillance getting built into telecommunication infrastructure wasn't enough merger drama for you, add in the aforementioned Clearwire with a dash of Dish — who had made a bid to buy Clearwire out from under Sprint. The good news for Sprint is that Clearwire will borrow $80 from Sprint in a deal that makes a Dish buyout look much less likely,

Bottom line? The waters that Sprint and SoftBank are trying to navigate don't seem quite as rocky as those that waylaid the AT&T / T-Mobile merger, but the deal isn't quite in safe harbor yet.