Japan's Softbank is facing a setback in its $20.1 billion bid to acquire control of US-based Sprint Nextel, with the Department of Justice (DoJ) asking telecom regulator FCC to defer approving the deal.
The DoJ, FBI and Department of Homeland Security want more time to review “any national security, law enforcement, and public safety issues” arising from the deal, according to a filing on the FCC website.
Both Sprint and an independent analyst told Bloomberg that they believe the request to be routine for any M&A involving an international buyer.
But the request comes amid calls from multiple circles to probe the implications of the merger.
The Communications Workers of America union has submitted an FCC filing alleging that as Softbank is working with Huawei and ZTE on wireless rollouts in Japan, the deal could allow the Chinese vendors “significant penetration” in the US market, Bloomberg reported.
The union claims this could pose a threat to national security. A US House Intelligence Committee report last year recommended operators avoid sourcing gear from the Chinese vendors due to concerns over cyberespionage, despite finding no evidence to back up allegations Huawei and ZTE may have ties to the Chinese government.
Sprint's larger rival AT&T has meanwhile called on the FCC to probe the amount of Spectrum Sprint would control if it follows through with plans to use the cash injection to buy control of 4G operator Clearwire.
AT&T VP Brad Burns has argued that the two deals “will give one of Japan's largest wireless companies control of significantly more US wireless spectrum than any other company.”
Finally, DISH Network, which has its own designs on a Clearwire acquisition, had asked the FCC to extend the time for interested parties to file an opposition to the deal. But the satellite TV operator has now indicated it won't make a formal objection, due to its ongoing discussions with Clearwire.