It looks like the the merger between the United States’ third largest wireless carrier Sprint and Japan’s third largest carrier SoftBank took a small step closer to fruition as the two companies have agreed to avoid using Huawei hardware after the merger occurs. The confirmation of the agreement comes by way of congressman Mike Rogers out of Michigan, who leads the House Intelligence Commission.
According to Congressman Rogers:
“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”
The deal, to those of you who may not know, is for SoftBank to acquire 70% of the carrier for a reported $20 billion dollars, has been hung up by US regulators and agencies who are nervous about hardware coming from Chinese Suppliers.
One of the world’s largest telecom companies, Huawei has been trying to expand their footprint in the west in recent years but have been hit with roadblocks at seemingly every turn. Recently the company has been cleared of charges of espionage after a lengthy 18 month White House ordered review. That hasn’t stopped the fears however as a House Intelligence Committee report claims that due to their close relationship with the Chinese government Huawei and their main in country rival ZTE “can potentially give an opening for Chinese intelligence services to use U.S. telecommunications networks for spying.” Additionally there is a new provision in place signed by President Obama where any government agency with plans on buying IT equipment from Chinese manufacturers must first get approval.
Huawei spokesman William Plummer responded this way:
“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. Everyone is global and every company faces the same cyber-challenges.”
The merger is slowly making it’s way towards approval as it goes through reviews by the FCC, the Justice Department, and the Committee on Foreign Investment.