Sprint $26.5B merger passes more regulatory hurdles

T-Mobile and Sprint are respectively the third and fourth-largest wireless carriers in the United States

T-Mobile and Sprint are respectively the third and fourth-largest wireless carriers in the United States More

Fortunately, this week the two carriers received some good news courtesy of the United States Committee on Foreign Investment, also known as Cfius, who according to a report from The Wall Street Journal unanimously approved T-Mobile's planned takeover of Sprint. The proposed merger still has to clear the Federal Communications Commission, which has been skeptical of past attempts by the two companies to combine.

People familiar with the deal said that US officials had pressured Deutsche Telekom to stop using Huawei gear, and the companies believed they had to comply to win approval from CFIUS, headed by the Treasury Department.

"The CFIUS review took place while a host of other USA officials waged a separate campaign to persuade allies to cut ties with China's Huawei Technologies Co., which works with Deutsche Telekom and Softbank overseas".

Deutsche Telekom indicated Thursday it may drop Huawei from its list of network suppliers, saying it's re-evaluating its purchasing strategy amid security concerns surrounding the Chinese company.

T-Mobile and Sprint now don't use any networking hardware from Huawei, but their parent companies do in other countries. Deutsche Telekom went through a similar process when it entered the US market.

The parties have an agreement in principle with Cfius, with final details still to be worked out, said one of the people. "John Legere, T-Mobile's chief executive, has argued that he would 'lower prices to attract new customers, '" writes Sui-Lee Wee for the New York Times.

The combination of Sprint and T-Mobile will create a strong telecom operator that will be in a better to position to take AT&T and Verizon. Huawei did not respond to a request for comment. Cabinet officials, lawmakers and regulators have all raised the alarm, sometimes directly urging businesses to oppose deals with the company.

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