Softbank Makes Concessions to Feds, to Grease Sprint Deal: Report
Softbank, needing to win government approval of its bid for Sprint, has offered influence over its board and to remove Huawei equipment.As Sprint and Softbank, Japan's third-largest wireless carrier, move toward the completion of a merger first announced in October 2012, Softbank has said it will make certain concessions to help win U.S. regulators' approval of the deal. Softbank has said it will allow the federal government to approve one of the directors it names to the Sprint board, the Wall Street Journal reported May 22. That person will be responsible for overseeing national security issues and will also be a member of the Sprint board's compensation committee, said the Journal. The deal between the carriers includes Softbank acquiring a 70 percent stake in Sprint in exchange for $20.1 billion. That a non-U.S. entity would have control of such critical U.S. infrastructure gives many pause, in regard to security. At the outset of the deal, AT&T Vice President Brad Burns expressed concern about a foreign company having "control of significantly more U.S. wireless spectrum than any other company." To further ease such concerns, Softbank CEO Masayoshi Son has also said that Softbank will remove any equipment from Huawei, a Chinese company that the U.S. government has called a potential security threat. A U.S. House Intelligence Committee last year cautioned U.S. companies working in areas involved in critical infrastructure, such as railways and utilities, against using equipment from Huawei or ZTE, another Chinese manufacturer of telecom equipment.
Sprint is in the process of acquiring 4G provider Clearwire—a process that took a step forward May 22, when Clearwire announced that it had accepted an increased bid from Sprint—and the Clearwire network includes Huawei equipment, though not within its core infrastructure. Removing the Huawei equipment from the complete Sprint network will cost Softbank approximately $1 billion, said the Journal, citing sources close to the matter.