Wireless Analyst Jeff Kagan on Sen. Schumer Urging Caution on Sprint Softbank Deal

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Both Softbank and DISH Network want Sprint Nextel. Technology Industry Analyst Jeff Kagan is available to speak with reporters, or may be quoted through this release.

Jeff KAGAN, Industry Analyst

Technology Industry Analyst Jeff Kagan is available to speak with reporters, or may be quoted through this release.

Senator Charles Schumer urged regulators to use extreme caution when reviewing the proposed acquisition of the number three wireless provider in the US, Sprint Nextel by Softbank from Japan. He says Softbank's use of Chinese networking gear could open US networks to snooping and hacking according to the Associated Press, May 28, 2013.

Tech analyst Jeff Kagan comments on this story.

“This is the problem I was concerned about when the Sprint Nextel Softbank deal was announced several months ago. While this deal may be good for Sprint and for Softbank, the question of China and security is going to play a large role. I don't think Softbank is the problem. Rather I think China is the problem,” says Principal analyst Jeff Kagan.

Softbank saw this coming and took the right tone saying they would stop doing business with Chinese Huawei and remove the gear from their network. Softbank would also allow a board member from the US to keep their eye on the network for future problems.

“While this is comforting, whether it will be enough is the question. I don't think it will be enough. I think if US regulators can eventually approve this deal, there will be many similar protections built in. The question is will it get to that point?” says analyst Kagan.

“The question is will these protections cross the line. In the case of having a board member keeping their eye on the network and security is the first step toward government involvement with companies. I don’t think we have crossed that line before. That could turn the new Sprint Softbank company into a hybrid, like say the Postal Service,” says Kagan.

There are still many questions that have yet to be asked and answered. So Sprint Nextel and Softbank still have a long road ahead.

“Whether this problem is real or imagined no longer matters. When the government get's involved, it becomes real,” says Kagan.

“There are two companies involved in the Sprint Nextel acquisition battle, Softbank and DISH Network. If Softbank is not approved, would that mean DISH would win? Perhaps that’s what DISH has in mind. One way or another, either Softbank or DISH will acquire Sprint Nextel. The only question is which,” says Kagan.

About Jeff Kagan

Jeff Kagan is a Technology Industry Analyst who is regularly quoted by the media over 25 years. He offers comment on wireless, telecom and tech news stories to reporters and journalists.

He is also known as a Tech Analyst, Wireless Analyst, Telecom Analyst and Principal Analyst depending on the focus of the story.

He follows wireless, telecom, Internet, cable television and IPTV. He also follows the wide consumer electronics and technology space.

Reporters: Jeff Kagan sends comments by email to reporters and the media. If you would like to be added to this email list please send request by email.

Clients: Call or email Jeff Kagan to discuss becoming a client. Kagan has worked with many companies over 25 years as consulting clients.

Contact: Jeff Kagan by email at jeff(at)jeffKAGAN(dot)com or by phone at 770-579-5810.

Visit his website: at http://www.jeffKAGAN.com to learn more and for disclosures.

Kagan is an analyst, consultant, columnist and speaker.

Twitter: @jeffkagan

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