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?"
Redman agreed that "Japan is not China, so this helps" Sprint.
Still, he said that having a single U.S.-owned company among the world's top four carriers "will matter, especially after the issues on the Huawei report. This [involves] critical infrastructure."
Jeff Kagan, an independent analyst said that foreign ownership in telecom mergers is "hardly ever a problem, but last week's news about Huawei and ZTE is fresh on the mind. "
In a lengthy presentation ( download PDF) to investors, Sprint said a combination with SoftBank would create a company with $32 billion in annual mobile revenues, making it the third largest carrier in revenues in the world, behind Verizon Wireless at $37 billion and China Mobile at $43 billion.
The merged entity's sales would be slightly higher that AT&T's, which is also at about $32 billion.
A SoftBank-Sprint entity would have about 96 million subscribers, while AT&T now has 105 million and Verizon Wireless has 111 million. (Sprint alone now has some 56 million subscribers.)
In addition to an $8 billion capital infusion from SoftBank, the combined firm would have complementary smartphone and LTE network strategies, the companies said.
The $20 billion SoftBank investment in Sprint includes $8 billion in capital and $12 billion paid to investors.
Under the terms of the arrangement, Sprint CEO Dan Hesse would be CEO of the combined company.