T-Mobile, Sprint see Huawei shun clinching US deal

WASHINGTON/NEW YORK : T-Mobile US Inc and Sprint Corp believe their foreign owners’ offer to stop using Huawei Technologies equipment will help with the United States clearing their $26 billion merger deal, Reuters reported, 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 Huawei equipment, but their majority owners, Germany’s Deutsche Telekom AG and Japan’s SoftBank Group Ltd, respectively, use some Huawei gear in overseas markets.

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

Both Deutsche Telekom and Softbank were reported this week to be seeking to replace the world’s biggest network equipment maker as vendor. Now, T-Mobile and Sprint expect the U.S. panel, called Committee on Foreign Investment in the United States (CFIUS), to approve their deal as early as next week, the sources said.

The sources, however, cautioned that negotiations between the two companies and the U.S. government have not been finalized 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 U.S. government 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 telecom operators in Europe and Australia 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 United States and China over trade.