Trump moves to block the US entry of China Mobile, citing security concerns

(Reuters) – The US government decided Monday to prevent China Mobile ( 0941.HK ) from offering services to the US telecommunications market, recommending that its application be rejected because the public firm security risks.

The Federal Communications Commission (FCC) should refuse China Mobile's 2011 application To offer telecommunication services between the United States and other countries, the National Telecommunications and Information Administration (NTIA) said in a statement posted on his website. "After a major engagement with China Mobile, concerns over increased risks for law enforcement and national security interests have not been resolved," said David Redl, Assistant Secretary of Communications. and information from the US Department of Commerce, of which NTIA is a part.

China Mobile, the world's largest telecommunications operator with 899 million subscribers, did not immediately respond to Reuters' request for comment.

US President Donald Trump's decision on China Mobile comes amid growing trade friction between Washington and Beijing. The United States is expected to charge $ 34 billion worth of goods to China on July 6, which Beijing would have to respond with its own tariffs.

And ZTE Corp. ( 0763.HK ), China's second largest telecommunications equipment company, was forced to cease major operations in April after the United States slapped it with a Prohibition of supplier leaders who conspired to evade US sanctions against Iran and North Korea. ZTE is in the process of getting the ban lifted and announced a new board of directors last week.

China Mobile Communications Corp., a state-controlled company, held nearly 73 percent of China Mobile in December, according to Thomson Reuters data.

China Mobile shares fell 2.6% on Tuesday morning to their lowest in more than four years.

But Ramakrishna Maruvada, a Singapore-based analyst with Daiwa Securities, said the impact of the decision on China Mobile's business is "very minimal" because it derives most of its revenue from the domestic market .

"This does not move the needle," said Maruvada, adding that the timing of the decision was to be considered in the context of trade frictions between the United States and China.

In its recommendation, NTIA stated that its assessment was "largely based on China's intelligence and economic espionage activities targeting the United States, as well as on the size and technical resources and of China Mobile ". was "subject to exploitation, influence and control of the Chinese government" and that its application posed "significant and unacceptable risks to national security and law enforcement in the country". 39, the current national security environment ".

U.S. Senators and spies warned in February that China was trying, through means such as telecommunication companies, to gain access to sensitive American technologies and intellectual property.