China Mobile’s plans to offer telecom services from within the United States may face FCC hurdle.
China Mobile, the largest telecom operator in the world based on the number of mobile phone subscribers on its network, has approached the US administration for a license to run telecom services in 2011.
U.S. National Telecommunications and Information Administration (NTIA) has reportedly recommended that the Federal Communications Commission (FCC) deny China Mobile’s application to offer telecommunications services from within the United States on national security grounds.
The impact on China Mobile will be minimal because the largest telecom operator rely on China market for majority of its annual revenues.
“After significant engagement with China Mobile, concerns about increased risks to U.S. law enforcement and national security interests were unable to be resolved,” NTIA said in a statement on Monday.
The Federal Communications Commission (FCC) should deny the China Mobile’s 2011 application to offer telecom services between the United States and other countries, the National Telecommunications and Information Administration (NTIA) said in a statement posted on its website.
“After significant engagement with China Mobile, concerns about increased risks to U.S. law enforcement and national security interests were unable to be resolved,” said David Redl, assistant secretary for communications and information at the U.S. Department of Commerce.
ZTE, the No. 2 telecommunications equipment maker in China, stopped operations in April after the U.S. slapped it with a 7-year ban on technology sourcing saying it broke an agreement to discipline executives who conspired to evade U.S. sanctions on Iran and North Korea, Reuters reported.
ZTE announced a new board and chairman last week, but its settlement deal with the United States is facing opposition from some lawmakers in Washington.
Huawei is facing similar issues in the US due to its China connection. Huawei smartphones were banned in defence departments. AT&T also stopped buying Huawei smartphones. When the Donald Trump administration blocked the Qualcomm-Broadcom deal, they cited the backdoor support of China behind Broadcom.
NTIA said its assessment rested “in large part on China’s record of intelligence activities and economic espionage targeting the U.S., along with China Mobile’s size and technical and financial resources.”
China Mobile was subject to exploitation, influence and control by the local government and that its application posed substantial and unacceptable national security and law enforcement risks in the current national security environment, NTIA said.
U.S. senators and spy chiefs warned in February that China was trying, via means such as telecommunications firms, to gain access to sensitive U.S. technologies and intellectual properties.
Meanwhile, China’s Xiaomi plans to enter the United States next year, saying its U.S. connections should help it skirt political resistance. Lenovo is already enjoying a growing presence in China.
