Chinese telecommunications companies Huawei and ZTE are reported to be left out of a potential multi-billion Sprint contract due to national security concerns. According to a source with The Wall Street Journal, the Defense Department and U.S. lawmakers are concerned with the two companies’ ties to the Chinese government and the military. If Sprint works with these two companies, then it could lead to security implications of letting their equipment into the U.S. telecommunications infrastructure.
Officials argued that China’s military could use ZTE or Huawei’s equipment to disrupt American communications. Commerce Secretary Gary Lock called Sprint CEO Dan Hesse to discuss his concerns about rewarding a contract to the Chinese companies.
As a result, ZTE and Huawei lost bids that were lower than Alcatel-Lucent SA, Samsung, and Telefon L.M. Ericsson.