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T-Mobile-Sprint merger approval might hinge on...Huawei?
- The T-Mobile-Sprint merger could see U.S. regulator approval as early as next week.
- It appears the approval of the merger hinges on both companies’ parent companies refusing to use Huawei equipment.
- Governments worldwide are rejecting the use of Huawei equipment, citing security concerns.
The long-gestating proposed merger between U.S. carriers T-Mobile and Sprint might finally gain regulatory approval as early as next week. According to a recent report from Reuters, the government regulatory bodies involved with approving the merger agree that it can move forward.
However, the approval might hinge on an unexpected requirement: that Deutsche Telekom AG (T-Mobile’s parent company) and SoftBank Group Corp (Sprint’s parent company) refuse to use Huawei equipment in their respective worldwide networks.
Both parent companies said, according to Reuters, that they are “considering” adhering to the requirement to get the deal to go through.
Currently, neither T-Mobile or Sprint use Huawei network equipment in the United States. However, both SoftBank and Deutsche Telekom use Huawei equipment for their respective networks worldwide. The approval of the T-Mobile-Sprint merger would require both companies to slowly phase out Huawei equipment currently in use and refuse to buy Huawei equipment going forward.
The source for this Reuters report says that U.S. government officials have been pressuring Deutsche Telekom, in particular, to stop using Huawei equipment, citing security concerns related to Huawei’s alleged ties to the Chinese government.
Huawei has repeatedly asserted that these security concerns are unfounded. However, several countries — including the U.S., Australia, and Japan — refuse to use Huawei equipment for all or some networking purposes.
If the T-Mobile-Sprint merger approval does go through, it would cut the “Big Four” carriers down to the “Big Three,” with the other remaining U.S. carriers being AT&T and Verizon. The combined T-Mobile-Sprint company would simply be known as T-Mobile.