USA govt's NTIA recommends against licence for China Mobile

USA govt's NTIA recommends against licence for China Mobile

The Trump administration recommended to the Federal Communications Commission (FCC) on Monday that China Mobile not be allowed to enter the US telecommunications market.

He went on to say that China encourages its companies to comply with market rules and the laws of the countries it operates in.

China Mobile is a Chinese state-owned telecommunications company and also the largest telecoms carrier in the world.

The Trump administration has moved against Chinese telecom companies on a number of fronts in recent months, including a decision (later reversed) to bar ZTE from sourcing components to US suppliers - essentially a death sentence for the firm.

China Mobile had applied back in 2011 permission to enter the U.S. market, but this is being blocked over national security grounds. On July 6, the U.S. will impose tariffs on goods from China that's worth $34 billion, and Beijing is expected to provide its own tariffs in response.

A Chinese man walks under a China Mobile sign, while talking on the phone.

A week after ZTE paid a billion dollars and appointed a new board of directors with which to curry favour to the hairy citrus one, and get parts for their blocked toilets, it now seems that China's biggest telecoms company, you know, the state-owned one, is next in Trump's cross-hair (plug) s.

The No. 2 maker of telecommunications equipment in China had to cease its major operations last April after the US placed a supplier ban on the company saying it had broken its agreement to discipline its executives that had conspired to evade sanctions by the USA on North Korea and Iran.

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That forced ZTE in May to declare that "major operating activities of the company have ceased", as a outcome of the seven year ban on USA companies supplying with software and components.

Also, Ramakrishna Maruveda, an analyst for Daiwa Securities pointed out that the firm draws most of its income out of the domestic market, which is why the impact will not be overwhelming. "This doesn't move the needle".

Another firm based in China that has been focused on by White House officials is ZTE Corp.

However, the timing makes it likely that the China Mobile block will fuel the burgeoning trade war between the US and China, which was partly precipitated by Trump's assertion that the Chinese are trying to take advantage of the USA via espionage and technology theft.

The department said the company poses a national security risk, because it's vulnerable to exploitation by the country's ruling communist party.

China Mobile's shares were down 2%, the lowest it has been for more than four years according to Reuters. While noting that it had previously allowed licences to state-owned Chinese companies, it said the security climate had since changed and China Mobile's large size made it a particular source of concern.

That move was widely criticized by lawmakers on both sides of the aisle, who warned that China could use ZTE to spy on the US or threaten national security.

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