Trump Moves To Block China Mobile From U.S Market

Trump moves to block China Mobile from US market

The National Telecommunications and Information Administration, or NTIA, on Tuesday said the risks are too great to come to an agreement with the Chinese company.

After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved.

Trade frictions between the United States and China may have escalated on Monday after a U.S. government agency identified China Mobile, the world's largest wireless network operator by subscribers, as a national security threat.

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

The state-owned firm China Mobile Communications Corp. owns nearly 73 percent of China Mobile as of December, according to Thomson Reuters data.

State-owned China Mobile applied to the US Federal Communications Commission (FCC) for a licence to do so in 2011.

The news comes in the middle of growing tensions between the United States and China, following a supplier ban placed on its global telecoms vendor ZTE in April.

For some perspective, China Mobile is the largest carrier in the world, with nearly 900 million subscribers.

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Giving China Mobile access to the United States telecommunications market could lead to a spike in Chinese spying, it said. The company wasn't seeking to offer mobile services directly to U.S. customers, according to the USA filing.

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.

In return, the U.S. said it would remove the ban - a negotiation that has been linked to wider trade tensions between the USA and China.

The Trump administration in March blocked chipmaker Broadcom's $117 billion bid for rival Qualcomm. That leaves the United States, with its 327 million users, as one of the most promising targets.

Chinese smartphone and telecommunications company ZTE has been in crisis since April when the US Commerce Department banned American companies from selling it vital components. At the time the DOC said that the company had supplying Iran and North Korea with equipment that illegally included USA components.

While the move may be a setback for China Mobil, it will not have almost the effect that a ban of sales of equipment made by US companies to China's ZTE has had. But ZTE still faces an uncertain future, and some members of Congress are seeking to keep the ban in place.

It had planned something similar for the USA but this week (though not a direct to consumer offering apparently, but aimed at the enterprise sector) but its application was blocked following a recommendation from the National Telecommunications and Information Administration.

A statement from the National Telecommunications and Information Administration, an agency of the Commerce Department, attributed the recommendation to national security concerns.

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