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Trade war

SoftBank's links to Huawei questioned by US Congress

House letter raises national security concerns on T-Mobile-Sprint deal

SoftBank CEO Masayoshi Son has been deepening ties with Huawei in the run-up to the 5G era.

NEW YORK -- SoftBank Group's business ties to smartphone maker Huawei Technologies have come under fresh scrutiny in the U.S. Congress as lawmakers grow increasingly wary of the activities of Chinese companies.

At issue is the planned sale of SoftBank subsidiary Sprint to T-Mobile US. A draft letter circulating in the House of Representatives calls for a "full and robust national security investigation" of the deal due to SoftBank's long-standing ties with the Chinese company, Bloomberg reported on Tuesday.

The letter is to be sent to Treasury Secretary Steven Mnuchin next week.

T-Mobile struck a $26 billion all-stock deal in April to acquire Sprint, which would combine America's third- and fourth-largest wireless carriers.

T-Mobile parent Deutsche Telekom would have a 41.7% stake in the new T-Mobile, while SoftBank would hold 27.4%.

SoftBank has been deepening ties with Huawei in the run-up to the launch of 5G technology and the internet of things.

A joint demonstration by SoftBank and Huawei in Tokyo last September used a robotic arm to play air hockey against a human. The puck's trajectory was tracked via camera and computer, with the information then fed back to the arm for a response over a 5G connection.

The system -- made possible by 5G's extremely fast connections with an ultralow latency of a thousandth of a second -- can be adapted to applications for the internet of things.

A Sprint spokesperson on Tuesday evening, U.S. time, told the Nikkei Asian Review in a statement that the company and its majority owner SoftBank "have a strong record of compliance," with U.S. laws. "We spent more than $200 million replacing network gear that was deployed in the Clearwire network," the company said, referring to the U.S. telecommunications operator that Sprint fully acquired on the eve of the SoftBank purchase in 2013.

Sprint is "confident that the combined company will continue to make network security a top priority," the spokesperson said.

The House letter reflects heightened congressional animosity toward Chinese tech companies. A bipartisan group of lawmakers wrote to Google CEO Sundar Pichai in June to express concern over the company's strategic partnership with Huawei.

 

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