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US lawmakers raise national security concerns over Sprint/T-Mobile deal

A group of lawmakers from the U.S. House of Representatives reportedly plans to send a letter to Treasury Secretary Steve Mnuchin pushing for a thorough national security review of T-Mobile US Inc. and Sprint Corp.'s pending $26.5 billion merger.

Bloomberg News reported July 3 that a draft letter is currently being circulated in the House arguing that the proposed combination of Sprint and T-Mobile raises national security concerns as both companies "operate as subsidiaries of foreign-owned firms." Sprint is owned by the Japanese conglomerate SoftBank Group Corp. while T-Mobile's parent is Germany's Deutsche Telekom AG.

The letter reportedly notes SoftBank's business ties with the Chinese telecommunications company Huawei Technologies Co. Ltd., which along with China's ZTE Corp., has been identified by U.S. policymakers as a company representing a potential threat to U.S. networks.

According to Bloomberg, the letter warns Sprint and T-Mobile's merger "would increase telecommunications risks associated with third-party foreign entities, including Huawei, being utilized in the development of U.S. 5G infrastructure." 5G is the next generation of wireless technology, promising faster speeds and lower latency.

Mnuchin oversees the Committee on Foreign Investment in the U.S., or CFIUS, a government body that examines any M&A transaction involving a foreign owner taking control of a U.S. business. Earlier this year, President Donald Trump barred Broadcom Ltd., formerly based in Singapore, from acquiring U.S. chipmaker Qualcomm Inc. after CFIUS identified "potential national security concerns" around the proposed takeover. The group specifically pointed to the important role Qualcomm stands to play in the development of 5G.