Published: Чт, Июля 05, 2018
Business | By Kate Woods

Trump moves to block China Mobile from entering US

Trump moves to block China Mobile from entering US

The company wasn't seeking to offer mobile services directly to U.S. customers, according to the United States filing.

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.

If the deal went through, Redl wrote, "the Chinese government, through China Mobile, would have a greater ability to monitor, degrade and disrupt US government communications".

"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. At the time as per worldwide licensing procedures, the FCC requested comments from the Executive Branch on whether or not the license would be in the public interest.

While ZTE has been hit hard by the ban as nearly a third of the components used in its equipment come from USA suppliers, China Mobile, according to an analyst, will not be hurt much if blocked since it derives most of its income from home.

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A U.S. rejection is expected to have little impact on the company's income. 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. Beijing denies the allegations. 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.

A series of tech and telecommunications companies have run into difficulties over potential security concerns. In January, the Trump administration also blocked a $1.2 billion offer from the Chinese FinTech unicorn, Ant Financial Services Group, to acquire MoneyGram International Inc., a Dallas-based money transfer firm. That leaves the United States, with its 327 million users, as one of the most promising targets.

The Commerce Department has also levied sanctions against embattled Chinese phone maker ZTE out of national security concerns. That ban basically has shut down ZTE.

Still, the 205-page, heavily redacted document offered a window into the United States government's assessment of national security risks of doing business with Chinese entities, especially one with ties to the Chinese government as close as China Mobile's and in an industry as critical as telecommunications.

The delay on the deal comes as the administration seeks to clamp down on Chinese telecom companies.

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