Published: Thu, July 05, 2018
Markets | By Otis Pena

Trump Tells FCC to Deny China Mobile US License

Trump Tells FCC to Deny China Mobile US License

But security concerns over allowing Chinese companies access to critical USA infrastructure are not new: China Mobile filed its license application in 2011, and United States security reviewers raised red flags well before Donald Trump was elected president, according to a document released Monday by the advisory body.

The company had 901.9 million mobile subscribers, 671.8 million of which are on its 4G network, as of May 31.

"After significant engagement with China Mobile, concerns about increased risks to U.S. law enforcement and national security interests were unable to be resolved", the NTIA said in a statement about the mainland firm's 2011 application to the FCC. Phone calls or other communications from USA government agencies to global destinations could pass through China Mobile's network, even if the agencies are not customers of the operator, according to the filing.

"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.

In March 2013, the company repeated its request after a New York State Assemblyman, Anthony Brindisi, urged the FCC to reject the application on grounds of national security.

Back in 2011, China Mobile took the first legal step to make its entrance in the United States market, one that would allow it to offer wireless phone service to individuals within the nation.

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A Singapore-based analyst with Daiwa Securities, Mr Ramakrishna Maruvada, 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. Beijing denies the allegations. "Like every #China telecommunication company, they pose a grave security risk", Rubio tweeted.

The Trump administration in March blocked chipmaker Broadcom's $117 billion bid for rival Qualcomm. Ltd. In addition, ZTE Corp. was fined $1.4 billion and had to appoint a new board after it was caught breaching sanctions against trading with Iran and North Korea. One concern it cited was the deal could cause the United States to fall behind on the development of 5G technology and allow China to take the lead.

The US said it would remove the ban on ZTE if the company agreed to a $1bn penalty, changed its management and hired a compliance team picked by the US. But ZTE still faces an uncertain future, and some members of Congress are seeking to keep the ban in place.

The US government has been growing increasingly critical (perhaps even paranoid) when it comes to the operation of Chinese companies in the US.

The telecom may still be able to operate in the United States if it is able to convince government officials that it does not pose a threat to national security.

No such luck for those in America, where the company first applied for a Federal Communications Commission licence in 2011.

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