FCC chair opposes China Mobile’s effort to enter US market
Ajit Pai urges telecoms watchdog to vote against company’s application next month
Ajit Pai, chairman of the US Federal Communications Commission, said on Wednesday he opposes China Mobile’s effort to offer telecommunications services in the US amid concerns over national security.
“After reviewing the evidence in this proceeding, including the input provided by other federal agencies, it is clear that China Mobile’s application to provide telecommunications services in our country raises substantial and serious national security and law enforcement risks,” Mr Pai said in a statement.
He added: “Therefore, I do not believe that approving it would be in the public interest. I hope that my colleagues will join me in voting to reject China Mobile’s application.”
The five members of the FCC are due to vote on China Mobile’s application at a meeting next month. Officials said the other members are expected to support Mr Pai’s stance, according to Reuters.
The application seeks approval for connecting calls between the US and other countries.
China Mobile did not immediately respond to requests for comment.
Mr Pai’s opposition comes as the Trump administration pushes back against China’s influence in the telecommunications and technology industries and as the US races Beijing in the roll-out of 5G wireless infrastructure.
In a statement Mr Pai circulated to his colleagues, he said China Mobile is “vulnerable to exploitation, influence, and control by the Chinese government”. The FCC has said the company, China Mobile USA, is indirectly controlled by the Chinese government.
“This is more politically motivated than about whether there are objective grounds for doing this,” said Ramakrishna Maruvada, head of Southeast Asia and India telecoms research at Daiwa Capital Markets.
“There are a lot of operators in the world where the government holds a substantial equity ownership in an indirect or direct way.”
The FCC’s announcement is unlikely to have an impact on the stock price because China Mobile is mostly exposed to the domestic Chinese market, said Mr Maruvada.
“That’s what drives its revenues and earnings,” he said. “So to that extent I don’t think it’s going to make any material difference to its outlook from a share price or operations perspective.”
China Mobile’s share price in Hong Kong fell as much as 1.1 percent on Thursday to its lowest since early January.