- Top 10 Recession-Proof IT Jobs
- 7 Hot IT Jobs That Will Land You a Higher Salary
- Link Building Strategies and Tips for 2014
- Top 10 Accessories for Your iPad Air
Computerworld - Will U.S. regulators balk over Japan-based SoftBank becoming a 70% owner of Sprint, based in Overland Park, Kansas.?
On the surface, analysts say the foreign ownership issue is unlikely to derail the $20.1 billion deal.
Sprint and others point out that Japan is part of the World Trade Organization and is generally seen as an important U.S. trade partner.
However, some analysts expect that AT&T will raise strong objections to the deal. Sprint strongly opposed the AT&T's failed bid to buy T-Mobile USA last year, leaving some bad feelings between the firms.
Regulators and members of Congress may also express concerns about foreign ownership of a critical piece of the U.S. communications infrastructure.
Analysts also said that regulators may be concerned that the proposed SoftBank-AT&T deal would make AT&T the only solely-U.S. owned of the four largest wireless carriers. Fourth-ranked T-Mobile is owned by Deutsche Telekom of Germany, while UK-based Vodafone owns 45% of Verizon Wireless.
"Sprint hasn't had the best luck when it comes to the U.S. regulatory environment," said Gartner analyst Phillip Redman.
"It has had a couple of plans blocked before, and the SoftBank-Sprint deal will receive extra scrutiny because [SoftBank] is from outside the U.S. I'm sure both Verizon Wireless and AT&T will also have their say. AT&T may be looking for payback since Sprint was the main instigator when it came to blocking AT&T's T-Mobile acquisition last year," Redman added.
Both Verizon and AT&T refused to comment on the SoftBank-Sprint deal when reached early Monday.
Sprint clearly has assessed the regulatory climate.
In a statement, a spokesman said that Sprint anticipates that the U.S. Federal Communications Commissions will find the proposed transfer of Sprint's spectrum licenses to SoftBank "in the public interest."
The company expects that the merger will close in mid-2013.
The Sprint spokesman, Scott Sloat, added that Sprint believes the transaction is "pro-consumer and pro-competitive" and that "the foreign ownership review is fairly straightforward when WTO-member companies are involved."
Sloat said the FCC staff is experienced with foreign ownership issues and added: "Under well-established FCC policy, foreign ownership above the 25% benchmark is presumed to be in the public interest for companies organized in WTO-member countries."
The SoftBank-Sprint deal could by a Congressional committee study that recently concluded that Chinese telecommunication equipment vendors Huawei Technologies and ZTE pose security threats to the U.S.
Jack Gold, an analyst at J. Gold Associates, said federal regulators should not have a problem with a Japanese vendor like SoftBank.
A Chinese investor in Sprint, though, would "raise all kinds of red flags over security," he added, while also noting that politics could play a role.
"It would be tough for Congress or regulators to nix a deal with Japanese ownership, just as they didn't block Vodafone or Deutsche Telekom," he said, adding: "Of course, in today's political climate, who knows?"
Originally published on www.computerworld.com. Click here to read the original story.