WASHINGTON -- China Mobile's plans to enter the American market hit a wall on Wednesday after Ajit Pai, the chairman of the U.S. Federal Communications Commission, called for the denial of the application by the leading Chinese mobile phone operator to offer services.
The chairman claimed state-owned China Mobile poses a national security threat, similar to the argument used to block Chinese telecommunications equipment maker Huawei Technologies from the market.
"Safeguarding our communications networks is critical to our national security," Pai said in a statement. "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."
The FCC is scheduled to vote on China Mobile's application at its next meeting on May 9. "I hope that my colleagues will join me in voting to reject China Mobile's application," Pai added. If the FCC, which oversees the U.S. telecommunications industry, turns down the Chinese company's application, it will be the first time it has refused a foreign company looking to enter the wireless market.
China Mobile, a listed subsidiary of state-owned China Mobile Communications, filed in 2011 for approval to operate in the U.S., hoping to offer international phone services linking the American and other markets. In response, the U.S. Commerce Department and other agencies in July 2018 urged the FCC to turn down the application, citing the findings of their long-term investigations.
A high-ranking FCC official said allowing China Mobile to access the U.S. communications networks could risk the Chinese government engaging in spying or launching crippling attacks on America's infrastructure. He said that similar decisions would be made for all Chinese state-owned enterprises, and possibly for private Chinese companies as well. He said the U.S. market is open, mentioning Sprint and T-Mobile, which are backed by foreign players SoftBank Group and Deutsche Telekom.
The U.S. is increasingly suspicious of Chinese communications companies, fearing that doing business with them could lead to intelligence leaks. Washington has barred government agencies from procuring equipment from Huawei and ZTE, and plans to apply the same ban to companies receiving federal subsidies.
FCC Chairman Ajit Pai, President Donald Trump's apointee, takes a hard line against China. The security clampdown on China is popular with both Trump's administration and his fellow Republicans in Congress, as well as opposition Democrats. Trump and Pai recently declared that the U.S. aims to win the 5G race.