The American government proceeded to stop China Mobile from entering the nation’s telecommunications market, citing reasons that the company’s application hinted at national security risks.
China Mobile applied for entry in 2011 and is presently the largest carrier of the world with 899 million subscribers. The National Telecommunications and Information Administration (NTIA) of the US said that FCC should deny the entry.
An excerpt from the statement of NTIA reads: “After significant engagement with China Mobile, concerns about increased risks to U.S. law enforcement and national security interests were unable to be resolved.”
China Mobile did not respond to requests for comment. But, Lu Kang, the Chinese foreign ministry spokesperson, said when asked about the matter: “We urge the relevant side in the United States to abandon Cold War thinking and zero-sum games.”
He further added that Chinese companies remains to abide by the market rules and respect the laws of the nations it operates in and have urged that the US should be more reasonable in its moves regarding these companies.
As a recall, the matter in hand is the latest extension of the ongoing trade conflicts between China and the United States. On July 6, the US will impose tariffs on goods from China that’s worth $34 billion, and Beijing is expected to provide its own tariffs in response.
Now, China Mobile’s business will not be as hampered as it has been for ZTE. This is clear in China Mobile’s shares declined for only 2% today, July 3 and it is the company’s lowest close in over four years!
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.
NTIA further said that its assessment rested “in large part on China’s record of intelligence activities and economic espionage targeting the U.S., along with China Mobile’s size and technical and financial resources.”
On a related news, Xiaomi is ready to enter the American market by next year. The firm said that it has connections in the US that can help keep political pressures away from its plans to expand in the market.