Eagle vs dragon: China Mobile denied US operating licence as trade war heats up

No licence for you.
China, US, Trade, War, Business, Telecoms, FCC, Tech, Huawei, Telecommunications, Security, China Mobile, Mobile, Law, Tariffs, Government, Policy

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It remains to be seen what the next move in the US-China trade fight will be - and how it will affect telecoms.

A US Department of Commerce agency has recommended the Federal Communications Commission (FCC) deny a request by China Mobile for an operating licence in the United States, due to alleged national security concerns.

The move is the latest twist in a saga that began in 2011, when state-owned China Mobile, the largest mobile operator in the world in terms of the number of subscribers it has, applied for a licence in order to begin offering telecom services in the US.

“After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved,” David Redl, assistant secretary for communications and information at the Department of Commerce, said in a statement.

In recommending rejecting a licence, a scathing (and quite lengthy) report by the US National Telecommunications and Information Administration – which advises the president on telecoms and information policy issues – claimed that China Mobile was “vulnerable to exploitation, influence and control” by the Chinese government. “Granting the authorisation poses an unacceptable risk to US national security and law enforcement, and that risk can be expected to increase over time,” the report said.

The China Mobile battle is also the latest in the simmering trade struggle between the world’s two largest economies, with the US threatening to slap tariffs of US$34 billion on Chinese imports, and China threatening retaliation.

The deepening US-China rivalry is also affecting other telecommunications companies. China’s second-largest telecom company, ZTE, has long faced struggles, included being banned buying American technology for seven years – essentially ending its ability to operate as a business – until the decision was reversed. Yet a new ban is being mulled.

The US government is also weighing actions to ban equipment from Huawei and other Chinese telecoms. In addition, politicians have urged Google to sever its ties with Huawei over alleged “national security” concerns and accusations that Huawei has ties to the Chinese government – which Huawei has vehemently denied.

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