Thursday, March 28, 2013

Softbank Sprint Acquisition Conditions are Likely

Softbank's deal to acquire most of Sprint likely will be approved, but with some conditions, most observers might agree. Among those conditions notification requirements if Sprint plans to buy equipment from Chinese suppliers such as Huawei. 

The U.S. government likely would not bar purchases, but would require notification if Sprint planned to buy such equipment for the core of its network. Precisely how that would work is a bit unclear, since government authorities would have no power to block such purchases.

But presumably the pressure not to so so would effectively restrain Sprint, which would not want to risk the ire of regulators or the possibility of losing out on government contracts.

There are other more subtle possible effects, should a technology oversight clause be attached as a condition for approval of the deal. Other suppliers using Huawei products might likewise reconsider whether that is necessary and useful.

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