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T-Mobile, Sprint consider dropping Huawei, expect US security clearance for deal: Reuters

Key Points
  • T-Mobile US and Sprint expect their merger to be approved by a U.S. national security panel as early as next week, after their respective parent companies said they would consider curbing their use of equipment from China's Huawei Technologies, people familiar with the matter told Reuters.
  • U.S. government officials have been pressuring T-Mobile's German majority owner, Deutsche Telekom, to stop using Huawei equipment, the sources said.
  • The Committee on Foreign Investment in the United States (CFIUS) has been conducting a national security review of the Sprint deal, which was announced in April.
Michael Loccisano | Getty Images Entertainment | Getty Images

T-Mobile US and Sprint expect their merger to be approved by a U.S. national security panel as early as next week, after their respective parent companies said they would consider curbing their use of equipment from China's Huawei Technologies, people familiar with the matter told Reuters.

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.

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That pressure is part of the national security review of T-Mobile's $26 billion deal to buy U.S. rival Sprint, the sources said.

The Committee on Foreign Investment in the United States (CFIUS) has been conducting a national security review of the Sprint deal, which was announced in April. Negotiations between the two companies and the U.S. government have not been finalized and any deal could still fall through, the sources cautioned.

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.

Deutsche Telekom, Europe's largest telecoms company, on Friday 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.

Huawei has said the security concerns are unfounded. Tensions have been heightened by the arrest of Huawei's chief financial officer in Canada for possible extradition to the United States.