Rejection from FCC Looms Over China Mobile's US Business

Rejection from FCC Looms Over China Mobile's US Business

But the US Department of Commerce has recommended the licence request be denied.

July 3 (Reuters) - The U.S. government moved on Monday to block China Mobile from offering services to the U.S. telecommunications market, recommending its application be rejected because the government-owned firm posed national security risks.

"There had been plenty of back and forth over the years between the United States regulator and China Mobile about the operator's plans for such a facilities-based license in the country", said Lee.

The decision by the NTIA comes amid an ongoing trade dispute between the US and China, with tariffs on billions of dollars worth of USA and Chinese goods set to take effect later this week.

China Mobile applied for the entry in 2011 and is presently the largest carrier of the world with 899 million subscribers.

"Because China Mobile is subject to exploitation, influence, and control by the Chinese government, the Executive Branch believes that granting China Mobile's application. would produce substantial and unacceptable national security and law enforcement risks", said its report to the FCC, as obtained by CNN.

The world's biggest mobile network operator, China Mobile, probably won't get to enter the USA market after the Trump administration moved to block it on national security grounds.

China delays retaliatory tariffs, won't fire 'first shot' in potential trade war
The South China Morning Post said China is likely to cancel orders for 1.1 million tons of soybeans from the USA this year. The widely-read Global Times tabloid said in an editorial that China must prepare for containment by the United States.

The news comes in the middle of growing tensions between the USA and China, following a supplier ban placed on its global telecoms vendor ZTE in April. The company wasn't seeking to offer mobile services directly to U.S. customers, according to the United States filing.

While ZTE was hit hard with the supplier ban, as close to a third of all components its uses are from suppliers in the U.S., China Mobile, says one analyst, will not be hurt that much since most of the oncomes it generates is from China.

The American government proceeded to stop China Mobile from entering the nation's telecommunications market, citing reasons that the company's application hinted for national security risks.

Another Chinese company that has been caught in the crosshairs of the trade spat is ZTE Corp. The US1 in June reached a deal to allow ZTE to get back in business after the Chinese telecommunications company pays a record fine and agrees to management changes.

If China Mobile's application went through, it would enable the Chinese government to use it to spy on USA government agencies and other targets on domestic phone networks, the agency alleged.

We've seen leaked government documents revealing some of these concerns, and the feds previously detailed worries about phone makers ZTE and Huawei, the latter of which has struggled to break into the market due in large part to potential security issues.

The Chinese spokesperson said that Beijing was well prepared to take the necessary measures if the tariffs came into force.

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