T-Mobile, Sprint see Huawei shun clinching US deal -sources

Lisa Duan, a visitor from China, holds a sign in support of Huawei outside of the B.C. Supreme Court bail hearing of Huawei CFO Meng Wanzhou, who is being held on an extradition warrant in Vancouver, British Columbia, Canada. (File Photo/Reuters)
Updated 16 December 2018
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T-Mobile, Sprint see Huawei shun clinching US deal -sources

WASHINGTON/NEW YORK: T-Mobile US Inc. and Sprint Corp. believe their foreign owners’ offer to stop using Huawei Technologies equipment will help with the United States clearing their $26 billion merger deal, sources said, underscoring the lengths to which Washington has gone to shut out the Chinese company.
Like all major US wireless carriers, T-Mobile and Sprint do not use Huawei equipment, but their majority owners, Germany’s Deutsche Telekom AG and Japan’s SoftBank Group Ltd, respectively, use some Huawei gear in overseas markets.
People familiar with the deal between T-Mobile and Sprint, the third and fourth largest US wireless carriers, said US government officials had been pressuring Deutsche Telekom to stop using Huawei equipment, and the companies believed they had to comply before a US national security panel would let them move forward on their deal.
Both Deutsche Telekom and Softbank were reported this week to be seeking to replace the world’s biggest network equipment maker as vendor. Now, T-Mobile and Sprint expect the US panel, called Committee on Foreign Investment in the United States (CFIUS), to approve their deal as early as next week, the sources said.
The sources, however, cautioned that negotiations between the two companies and the US government have not been finalized yet, and any deal could still fall through. They asked not to be identified because the matter is confidential.
Sprint, T-Mobile, Deutsche Telekom, SoftBank and CFIUS declined to comment. Huawei did not respond to a request for comment.
The US government and its allies have stepped up pressure on Huawei over concerns that the company is effectively controlled by the Chinese state and its network equipment may contain “back doors” that could enable cyber espionage, something which Huawei denies. Several telecom operators in Europe and Australia have said they will exclude the Chinese firm from their fifth-generation (5G) mobile networks.
The pressure on Huawei has already heightened tensions between the United States and China over trade. Earlier this month Meng Wanzhou, Huawei’s chief financial officer and daughter of its billionaire founder, was arrested in Canada on a US extradition request. US prosecutors have accused her of misleading multinational banks about Huawei’s control of a company operating in Iran. China has asked for her release.
In an interview with Reuters earlier this week, US President Donald Trump drew a connection between the Huawei CFO extradition case and his administration’s trade row with China, saying he would be willing to intervene if it helped resolve the dispute or serve US national security interests.
The United States has been stepping up its targeting this year of both Huawei and ZTE, China’s second-largest maker of telecommunications equipment. Last March, Trump blocked chip maker Broadcom Ltd’s attempted $120 billion takeover of US peer Qualcomm Inc. over concerns the deal could boost Huawei’s competitive position.
ZTE was crippled in April when the United States banned American firms from selling it parts, saying the company broke an agreement to discipline executives who had conspired to evade US sanctions on Iran and North Korea.
The ban, which became a source of friction in Sino-US trade talks, was lifted in July after ZTE paid $1.4 billion in penalties, allowing the firm to resume business.
SoftBank plans to replace 4G network equipment from Huawei with hardware from Nokia and Ericsson, Nikkei reported on Thursday, without citing sources.
Deutsche Telekom, Europe’s largest telecoms company, on Friday said it was reviewing its vendor plans in Germany and other European markets where it operates, given the debate on the security of Chinese network gear.
The Justice Department and Federal Communications Commission must also approve T-Mobile’s and Sprint’s merger. T-Mobile previously said it expected the deal to close in the first half of 2019.


Oil firms as China’s slowdown not as steep as some expected

Updated 1 min 11 sec ago
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Oil firms as China’s slowdown not as steep as some expected

  • In an expected cooling, China’s economy grew by 6.6 percent in 2018, its slowest expansion in 28 years
  • ‘Brent can remain above $60 per barrel on OPEC+ compliance, expiry of Iran waivers and slower US output growth’

SINGAPORE: Oil prices firmed on Monday after data showed China’s economic slowdown was not as big as some analysts had expected, with supply cuts led by the Organization of the Petroleum Exporting Countries also offering support.
International Brent crude oil futures were at $62.83 per barrel at 0259, up 13 cents, or 0.2 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $53.92 a barrel, up 12 cents, or 0.2 percent.
Both oil price benchmarks had dipped into the red earlier in the session on fears that China’s 2018 economic growth figures would be weaker.
In an expected cooling, China’s economy grew by 6.6 percent in 2018, its slowest expansion in 28 years and down from a revised 6.8 percent in 2017, official data showed on Monday. China’s September-December 2018 growth was at 6.4 percent, down from 6.5 percent in the previous quarter.
Although the slowdown was in line with expectations and not as sharp as some analysts had expected, the cooling of the world’s number two economy casts a shadow over global growth.
“The global outlook remains murky, despite emerging positives from a dovish Fed (now boosting US mortgage applications), faster China easing (China credit growth stabilizing) and a more durable US-China truce,” US bank JP Morgan said in a note.
Despite this, analysts said supply cuts led by OPEC would likely support crude oil prices.
“Brent can remain above $60 per barrel on OPEC+ compliance, expiry of Iran waivers and slower US output growth,” JP Morgan said.
It recommended investors should “stay long” crude oil.
Researchers at Bernstein Energy said the supply cuts led by OPEC “will move the market back into supply deficit” for most of 2019 and that “this should allow oil prices to rise to $70 per barrel before year-end from current levels of $60 per barrel.”
In the US, energy firms cut 21 oil rigs in the week to Jan. 18, taking the total count down to 852, the lowest since May 2018, energy services firm Baker Hughes said in a weekly report on Friday.
It was biggest decline since February 2016, as drillers reacted to the 40 percent plunge in US crude prices late last year.
However, US crude oil production still rose by more than 2 million barrels per day (bpd) in 2018, to a record 11.9 million bpd.
With the rig count stalling, last year’s growth rate is unlikely to be repeated in 2019, although most analysts expect annual production to average well over 12 million bpd, making the US the world’s biggest oil producer ahead of Russia and Saudi Arabia.