ibusinesslines.com November 17, 2018

Trump Cites Security Concerns for Moving to Block China Mobile

05 July 2018, 03:04 | Kelvin Horton

Trump Cites Security Concerns for Moving to Block China Mobile

China Mobile

The Federal Communications Commission (FCC) should deny the state-owned China Mobile's 2011 application to offer telecommunication services between the U.S. and other countries, the National Telecommunications and Information Administration (NTIA) said in a statement posted on its website.

The NTIA told the FCC it is concerned about the amount of control the Chinese government has over the firm, US law enforcement's ability to ask for information in the course of its duties and the potential of intentional disruption of other telecommunications networks the interconnection could bring.

Meanwhile, China Mobile has been blocked by the United States' National Telecommunications and Information Administration (NTIA) from obtaining a license to sell mobile services in America.

America's ban on ZTE is affecting its business as far away as Europe, if Bloomberg's sources are right.

China Mobile did not respond to request for comment.

The move by the NTIA - an arm of the Commerce Department that advises US President Donald Trump on telco and information issues - comes at a time of heightened tensions between the US and China over trade and telecom issues.

The recommendation comes amid rising tensions between the U.S. and China over national security concerns. The U.S.is set to impose tariffs on $34 billion of Chinese goods on Friday, and another $16 billion may follow.

The Section 214 license application has been with the FCC for years, the agency having been tasked to seek info from the Executive Branch over whether authorizing the carrier would be "in the public interest of the USA".

It is worth noting that China Mobile is technically the largest telecom carrier in the world with 899 million subscribers.

The Commerce Department said it imposed the ban on ZTE because the company breached a 2017 deal in which it agreed to pay a fine for violating sanctions on Iran and North Korea. ZTE, the Chinese telecom equipment maker that was blocked off from U.S. suppliers in April for violating a sanctions settlement, has seen its stock fallen by about half since the ban was announcement.

The impact of the ruling on China Mobile's business is "very tiny", said Ramakrishna Maruvada, a Singapore-based analyst with Daiwa Securities.

The NTIA claimed state-owned China Mobile is subject to exploitation, influence, and control by the Chinese government. The National Telecommunications and Information Administration (NTIA) of the U.S. said that FCC should deny the entry.

NTIA further said that its assessment rested "in large part on China's record of intelligence activities and economic espionage targeting the USA, along with China Mobile's size and technical and financial resources". This is clear in China Mobile's shares declined for only 2% today, July 3 and it is the company's lowest close in over four years!

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