03 July 2018
| Natalie Bannerman
The Trump-led US government has taken steps to try and prevent China Mobile from offering its services in the US telecommunications market.
David Redl, assistant secretary for communications and
information at the US Department of Commerce (DOC) penned a
recommendation to the Federal Communications Commission (FCC)
through the National Telecommunications and Information
Administration (NTIA) on behalf of the Executive
Branch, recommending that China Mobile’s
application be denied.
It was back 2011 that China Mobile applied for a license to
offer its telecoms services between the US and other countries,
under section 214 of the Communications Act of 1934. At the
time as per international licensing procedures, the FCC
requested comments from the Executive Branch on whether or not
the license would be in the public interest.
"After significant engagement with China Mobile, concerns
about increased risks to US law enforcement and national
security interests were unable to be resolved. Therefore, the
Executive Branch of the US government, through the National
Telecommunications and Information Administration pursuant to
its statutory responsibility to coordinate the presentation of
views of the Executive Branch to the FCC, recommends that the
FCC deny China Mobile’s Section 214 license
request," said Redl.
Speaking to Reuters in response to the decision Lu
Kang, spokesman for the Chinese foreign ministry said: "We urge
the relevant side in the United States to abandon Cold War
thinking and zero sum games." He went on to say that China
encourages its companies to comply with market rules and the
laws of the countries it operates in. He also said that the US
should stop putting "unreasonable pressure" on Chinese
The news comes in the middle of growing tensions between the
US and China, following a supplier ban placed on its global
telecoms vendor ZTE in April. At the time the DOC said that the
company had supplying Iran and North Korea with equipment that
illegally included US components.
As a result it is now illegal for US tech companies such as
Cisco, Dell, Intel, Microsoft, Oracle, Qualcomm and Symantec to
trade with ZTE.
And less than a month later ZTE said that it was shutting down
all major operating activities. But in a last ditch attempt
to save jobs, Trump doubled back on te decision and agreed a
penalty of $1 billion and number of other conditions with the
company to try and reach a settlement without having the
company shut down. A decision that was shot down when
only last month when the US Senate voted 85 to 10 to reinstate
the ban on ZTE.
China Mobile’s shares were down 2%, the lowest
it has been for more than four years according to
Reuters. But Ramakrishna Maruvada, anaylyst Daiwa
Securities said that the impact was minimal given that the
company makes most of its money from the domestic market.
In its recommendation the NTIA said its assessment was based
on "China’s record of intelligence activities and
economic espionage targeting the U.S., along with China
Mobile’s size and technical and financial
Adding that China Mobile is "subject to exploitation,
influence and control by the Chinese government" and that its
application posed "substantial and unacceptable national
security and law enforcement risks in the current national
Department of Commerce,
National Telecommunications and Information Administration,
Federal Communications Commission