Trump administration recommends against allowing China Mobile access to U.S. market

Headquarter of China Mobile in Beijing financial street

Headquarter of China Mobile in Beijing financial street

Some seven years after the company asked the Federal Communications Commission (FCC) for a license to carry voice traffic in and out of the USA -something that would require connecting US telecoms networks to China Mobile's network-the White House effectively closed off the possibility with a negative recommendation.

According to the NTIA statement, China Mobile is subject to "exploitation, influence and control" by the Chinese government, and in the "current national security environment" this would pose "substantial and unacceptable national security and law enforcement risks".

The NTIA said that, following consultation with the Trump administration, it will reject an application by China Mobile requesting to offer telecom services in the United States.

China Mobile, a subsidiary of state-owned China Mobile Communication Corp.

However, Chinese foreign ministry spokesman Lu Kang, in response to a question about China Mobile at a daily briefing, said: "We urge the relevant side in the United States to abandon Cold War thinking and zero sum games".

"This doesn't move the needle", he said, adding the timing of the decision was to be viewed in the context of the US-China trade frictions.

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The Chinese government could use links established by China Mobile for economic espionage and intelligence collection, according to the filing.

China Mobile is a Chinese state-owned telecommunications company and also the largest telecoms carrier in the world. Among the services China Mobile planned to offer were data roaming, data center and cross-connect, cloud storage, mobile virtual network operator, and common-carrier services.

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

The Trump administration is trying to counter China's ambitions to become a global tech leader, accusing China of pressuring companies and stealing intellectual property to get ahead.

USA officials imposed the ban because of what they said were false statements by the firm regarding the illegal sale of goods to Iran and North Korea. In early June, however, the president eased restrictions on ZTE after concerns that they harmed USA telecom gear makers that sold components to the company. But ZTE still faces an uncertain future, and some members of Congress are seeking to keep the ban in place.

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. In particular, the NTIA was concerned about China Mobile interconnecting with the United States telecoms infrastructure, given the "importance and sensitivity" of that infrastructure for national security and law enforcement.

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