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T-Mobile, Sprint feel shunning Huawei will clinch merger clearance: Report

Like all major US wireless carriers, T-Mobile and Sprint do not use Huawei equipment, but their owners like, Germany's Deutsche Telekom AG and Japan's SoftBank Group use some Huawei gear

Reuters  |  Washington/ NewYork 

File photo of smartphones with the logos of T-Mobile and Sprint. (Photo: Reuters)
File photo of smartphones with the logos of T-Mobile and Sprint. (Photo: Reuters)

Inc and believe their foreign owners' offer to stop using Technologies equipment will help with the clearing their $26 billion merger deal, sources said, underscoring the lengths to which Washington has gone to shut out the Chinese company.

Like all major U.S. wireless carriers, T-Mobile and Sprint do not use equipment, but their majority owners, Germany's AG and Japan's Ltd <9984.T>, respectively, use some gear in overseas markets.

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

Both and Softbank were reported this week to be seeking to replace the world's biggest as vendor. Now, T-Mobile and Sprint expect the U.S. panel, called in the (CFIUS), to approve their deal as early as next week, the sources said.

The sources, however, cautioned that negotiations between the two and the 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 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. Several in and have said they will exclude the Chinese firm from their fifth-generation (5G) mobile networks.

The pressure on Huawei has already heightened tensions between the and over trade. Earlier this month Meng Wanzhou, Huawei's and daughter of its billionaire founder, was arrested in on a U.S. extradition request. U.S. prosecutors have accused her of misleading multinational banks about Huawei's control of a company operating in has asked for her release.

In an interview with earlier this week, U.S. drew a connection between the Huawei extradition case and his administration's trade row with China, saying he would be willing to intervene if it helped resolve the dispute or serve U.S. national security interests.

The United States has been stepping up its targeting this year of both Huawei and ZTE, China's second-largest maker of Last March, Trump blocked Broadcom Ltd's attempted $120 billion takeover of U.S. peer over concerns the deal could boost Huawei's competitive position.

was crippled in April when the United States banned American firms from selling it parts, saying the company broke an agreement to discipline executives who had conspired to evade U.S. sanctions on and

The ban, which became a source of friction in Sino-U.S. trade talks, was lifted in July after paid $1.4 billion in penalties, allowing the firm to resume

SoftBank plans to replace from Huawei with hardware from and , Nikkei reported on Thursday, without citing sources.

Deutsche Telekom, Europe's largest telecoms company, on Friday said it was reviewing its vendor plans in and other European markets where it operates, given the debate on the security of Chinese network gear.

The Justice Department and must also approve T-Mobile's and Sprint's merger. T-Mobile previously said it expected the deal to close in the first half of 2019.



First Published: Sat, December 15 2018. 06:44 IST