Sprint, Softbank agree to ditch Huawei over spy concerns

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Sprint Softbank Merger Huawei Equipment

Sprint

Sprint (S) and Japanese carrier Softbank (SFTBY) have confirmed to U.S. lawmakers they won’t use equipment from Huawei following their upcoming merger, Bloomberg reported. Softbank announced plans last October to pay more than $20 billion to acquire a 70% stake in Sprint. The deal was approved by the board of directors at both companies and was awaiting the green light from the Federal Communications Commission.

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Earlier this year, however, the United States Department of Justice asked the FCC to defer the planned merger so that it would have more time to review the proposal for “any national security, law enforcement, and public safety issues.”

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U.S. officials have become increasingly worried about telecom equipment provided by Chinese companies Huawei and ZTE. It was previously reported that both companies could be working with the Chinese government for non-commercial reasons.

“If government approval of the transaction is somehow contingent on an agreement to restrict purchase of equipment from any vendor based on the flag of heritage, then it is a sad day for free and open global trade and it does nothing to secure the network,” Bill Plummer, a Huawei spokesperson, said regarding the news. “Everyone is global and every company faces the same cyber challenges.”

Sprint also plans to replace Huawei equipment in Clearwire’s network, in which the company owns a majority stake.

“I have met with Softbank and Sprint regarding this merger and was assured they would not integrate Huawei in to the Sprint network and would take mitigation efforts to replace Huawei equipment in the Clearwire network,” said Representative Mike Rogers, a Michigan Republican who is the head of the House Intelligence Committee.


This article was originally published on BGR.com

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