Amid security concerns over the cross-border takeover of Sprint Nextel by Softbank, the Tokyo-based company has agreed to give the U.S. federal government the right to approve a director it will nominate to Sprint’s board.
According to a report by the Wall Street Journal (spotted first by The Verge), the director, who will be one of 10 on the board, will be in charge of overseeing national security issues. He will ensure that Sprint complies with the agreement on network security that it is negotiating with federal agencies.
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On top of that, the U.S. government is also said to be seeking more concessions – including the right to oversee some of Sprint’s equipment purchases and a request to remove Chinese equipment from a Sprint affiliate’s network.
The US government harbours concerns that a takeover by a foreign company could open the door to security issues via intrusion into its telecommunications networks, and is especially worried that Chinese companies such as Huawei and ZTE could provide telecom equipment that may threaten its safety.
Softbank CEO Masayoshi Son had earlier told US House Intelligence Committee Chairman Mike Rogers that he would remove Huawei equipment in use by the affiliate, Clearwire Corp, the publication said. The step will reportedly cost up to $1 billion.
Sprint is being courted by both Softbank and American satellite-TV provider DISH. Sprint last month said it had received a waiver from Softbank to start preliminary talks with DISH regarding it’s $25.5 billion bid.
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