Trump administration says China Mobile should not access USA market

The National Telecommunications and Information Administration or NTIA said through a prepared statement on its website that the FCC or Federal Communications Commission should deny the 2011 application by the Chinese firm that is state-owned to offer its telecommunications services between the USA and other nations.

Commerce Department assistant secretary David Redl said that after "significant engagement" with the Chinese mobile giant, "national security interests were unable to be resolved". For example, Huawei has been effectively banned from the wireless equipment and phone business in the United States, while the Trump administration moved against ZTE's business ties with USA companies.

An investor checks stock information on a mobile phone at a brokerage house in Shanghai, China June 20, 2018.

The statement indicates the USA government has presented issues to China Mobile that could potentially have been addressed, but details aren't provided.

Asked in January about United States opposition to China Mobile's entry into the USA market, a spokesperson at China's Ministry of Foreign Affairs said that the government encourages Chinese enterprises to abide by the laws of the markets they invest in and that countries should level the playing field for Chinese enterprises.

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

The Chinese government could use links established by China Mobile for economic espionage and intelligence collection, according to the filing.

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If China Mobile's application went through, it would enable the Chinese government to use it to spy on USA government agencies and other targets on domestic phone networks, the agency alleged.

China Mobile, the world's largest telecom carrier with 899 million subscribers, did not immediately respond to Reuters' request for comment. Customers could include fixed and mobile network operators, calling-card companies, and business customers. The worldwide calling business accounts for only a tiny portion of China Mobile's revenue, according to Ramakrishna Maruvada, an analyst with Daiwa Capital Markets. "Like every #China telecommunication company, they pose a grave security risk", Rubio tweeted.

The Commerce Department said it imposed the ban on ZTE because the company breached a 2017 deal in which it agreed to pay a fine for violating sanctions on Iran and North Korea. That ban basically has shut down ZTE.

Republican Senator Marco Rubio, R-Fla., applauded the decision in a post on Twitter on Tuesday, suggesting every Chinese telecommunications company poses grave security risks.

The Chinese companies strongly disputed the report's findings.

No such luck for those in America, where the company first applied for a Federal Communications Commission licence in 2011.