T-Mobile and Sprint have shared the news today with CNBC that their merger deal is expected to be cleared by a US national security panel. The approval is said to stem from both parent companies of the carriers agreeing to reduce their use of Huawei devices.
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This approval comes from the Committee on Foreign Investment in the United States (CFIUS) since both T-Mobile and Sprint are held by foreign parent companies.
U.S. government officials have been pressuring T-Mobile’s German majority owner, Deutsche Telekom, to stop using Huawei equipment, the sources said, over concerns that Huawei is effectively controlled by the Chinese state and its network equipment may contain “back doors” that could enable cyber espionage, something which Huawei denies.
Huawei’s CFO was just arrested earlier this month in Canada on a US extradition request for allegedly breaking US sanctions on Iran.
Sprint’s parent company, SoftBank, is already planning a shift from Huawei devices to those made by Nokia and Ericsson.
Sprint’s parent, SoftBank Group, plans to replace 4G network equipment from Huawei with hardware from Nokia and Ericsson, Nikkei reported on Thursday, without citing sources.
T-Mobile’s parent, Deutsche Telekom, said it was “reviewing its vendor plans in Germany and other European markets where it operates, given the debate on the security of Chinese network gear.”
Notably, this US security approval is separate from the FCC review that just recently resumed after the standard 180-day clock was paused back in September.
While this is one more step towards a T-Mobile/Sprint merger, the carriers are facing a good amount of pushback from a variety of organizations that fear the deal would reduce competition, result in thousands of job losses, and be negative overall for consumers.