Softbank and Sprint Promises Not to Use Huawei after Merge

 Softbank Sprint Nextel Corp. and Softbank Corp. told Representative Mike Rogers of Michigan that they will not use equipment from Chinese maker Huawei Technologies into Sprint’s network after the two companies merge. The Republican representative said that he expects the two companies to make the same assurances before any deal is approved by US agencies reviewing the merger.

Softbank and Sprint, the third largest US carrier in the United States, said they will answer all the concerns by the United States with regards to the potential electronic spying by China. The US government should block acquisitions or mergers by ZTE Corp. and Huawei, which are the two biggest phone-equipment manufacturers in China. According to Rogers’ committee report in October, the companies’ equipment can provide an opening for Chinese intelligence services to utilize the nation’s telecommunications networks for spying.

The deal between Softbank and Sprint has been reviewed by US Federal Communications Commission, Justice Department, and the Committee on Foreign Investment in the US, which is an interagency group that checks for security implications of foreign purchases of companies in the US.

According to US spokesman Bill Plummer, Huawwei doesn’t know about the national security review. He said that if government approval of any transaction depends on the restriction of purchasing equipment from a vendor based on their heritage then it will be a sad day for open global trade. He added that it does nothing to secure the network because everyone is global and everyone faces the same cyber security issues.

US agencies have reached security agreements in previous telecommunications mergers. The most recent one is for the approval of Deutsche Telekom AG’s merger of its T-Mobile with MetroPCS Communications. Deutsche Telekom agreed to disclose what equipment it has and if new vendors are used.

Softbank purchases base band units and antenna systems from ZTE and Huawei for its fourth-generation mobile network in Japan. Ericsson AB and Alcatel-Lucent equipment are used for its core network.