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The Trump administration decided to prevent a Chinese wireless telecommunications company from connecting to the US market, citing national security concerns.
China Mobile ( CHL ) wanted to provide cell phone services and other communication services between the United States and other countries. He submitted a license application to US regulators in 2011.
On Monday, the National Telecommunications and Information Administration, a branch of the US Department of Commerce, recommended that the Federal Communications Commission rejects the application. "Because China Mobile is subject to the exploitation, influence and control of the Chinese government, the executive branch believes that granting the candidacy of China Mobile … would entail significant and unacceptable risks for national security and law enforcement ". in a deposit at the FCC.
Related: Huawei top executive denounces US lawmakers as "closed and misinformed"
Giving China Mobile access to the US telecommunications market could lead to a spike in the price. Chinese spying. Telephone calls or other communications from US government agencies to international destinations could go through China Mobile's network, even though the agencies are not customers of the operator, according to the filing.
China Mobile, which has more than 900 million mobile customers, did not immediately respond to a request for comment on Tuesday. The company was not looking to offer mobile services directly to US customers, according to the US filing.
The FCC was not immediately available to comment outside normal office hours.
The US rejection is expected to have little impact on the company's revenues. According to Ramakrishna Maruvada, an analyst at Daiwa Capital Markets, international call activity accounts for only a tiny portion of China Mobile's revenue.
Increased Tensions
The move against China Mobile comes at a time of increased trade and security tension between the United States and China.
The Trump administration is trying to counter China's ambitions to become a global technology leader, accusing China of putting pressure on companies and stealing intellectual property to go forward. Beijing denies the allegations.
A number of technology and telecommunications companies have encountered difficulties with potential security issues.
The Trump administration in March blocked chip maker Broadcom ( AVGO ) $ 117 billion bid for competitor Qualcomm [19659004] QCOM ) . One of the concerns he cited was that the agreement could delay the United States in the development of 5G technology and allow China to take the lead.
Chinese Society of Smart Phones and Telecommunications ZTE ( ZTCOF ) is in crisis since April when the US Department of Commerce has banned US companies from selling him vital components.
Related: Where is ZTE? The Commerce Department said that it imposed the ban on ZTE because the company violated a 2017 deal in which it agreed to pay a fine for violating the sanctions against the company. 39, Iran and North Korea.
The Trump administration entered into a new contract with the company earlier this month to end the ban in exchange for an additional fine and a drastic management overhaul . But ZTE is still facing an uncertain future, and some members of Congress are seeking to keep the ban in place.
The US government has long been suspicious of Chinese companies with access to US telecommunications networks. A 2012 congressional report revealed that ZTE and its biggest Chinese rival, Huawei, were major threats to national security and that they could not be trusted to be free from foreign influence .
Chinese companies have strongly disputed the findings of the report. But ZTE and Huawei remain largely excluded from the market to provide telecommunications network equipment to US carriers.
– Rob Mclean contributed to this report
CNNMoney (Hong Kong) First published July 3, 2018: 1:11 AM ET
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