The CEO of T-Mobile and executive chairman of Sprint are set to be heard in front of House lawmakers tomorrow about their proposed merger, but newly released testimony is already giving a glimpse into how the companies will make their case. In one word: China.
In prepared remarks, T-Mobile CEO John Legere ties the proposed merger to “American innovation and national security,” and specifically argues that the merger will be necessary to make the United States a leader on next-generation 5G network technology. “The stakes are high — nothing less than preserving our edge in innovation and maintaining our security,” he plans to say.
The CEO plans to say that the US is “falling behind” China on 5G, which he says “has taken a global lead in the race.” He says in the remarks that only a newly merged T-Mobile will be able to compete.
“The stakes are high”
A representative for the Rural Wireless Association, which represents small carriers and counts Chinese company Huawei as a member, plans to say that T-Mobile and Sprint “have significant ties” to Chinese companies. In prepared remarks, Legere disputed that connection, saying that T-Mobile, like other major carriers, doesn’t use Huawei equipment in its network. “And we will never use it in our 5G network,” his remarks read.
Sprint’s executive chairman does not mention Huawei in his prepared remarks, although he makes a similar case about 5G in the United States, saying the merger “is about ensuring that the United States leads in the next generation of innovation, which will rely on the massive capacity that 5G can unleash.”
Chinese telecommunications companies like Huawei have faced increasing scrutiny in recent months, as US lawmakers have branded them security threats. Huawei has repeatedly denied that it would spy for the Chinese government.
The planned testimony tomorrow will also focus on what the deal will mean for consumers. The merger will require approval from the FCC and Justice Department, but some consumer advocates have fought against the idea, pitched by T-Mobile and Sprint, that a merger will benefit consumers. A representative for Public Knowledge, a group critical of the deal, plans to call the merger “a bad deal for consumers, competition, and America’s wireless future.”