United States Bans China Telecom Over National Security Concerns

China Telecom’s conduct had demonstrated a lack of candor, trustworthiness, and reliability, US authorities said.

On Tuesday, 26 October, the United States (US) Federal Communications Commission voted to revoke the licence China Telecom's American subsidiary to operate in the US, citing national security concerns.

China Telecom is a Chinese State-owned enterprise with subsidiaries in different parts of the world. It is the world's leading IT and communication service provider, working in over 110 nations.

The Federal Communications Commission (FCC) has given China Telecom a period of 60 days to discontinue its operations in the US. It stated that the company is “subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight.”

"China Telecom’s conduct had demonstrated a lack of candor, trustworthiness, and reliability that erodes the baseline level of trust that the Commission and other US government agencies require."

FCC

While a warning of the revocation was made by the FCC in 2020 and recommended by agencies like the Department of Justice, the joe Biden administration has upheld the Donald Trump era approach towards China and "has pledged to hold a tough line on China".

The shares of the company were earlier delisted by the New York Stock Exchange. The FCC has taken actions against other China-owned companies like the ComNet and Huawei Technologies on grounds of national security between 2019 and 2021.

The action follows a recommendation from executive branch agencies during the Trump administration last year and extends from a broader effort to remove Chinese links to US telecommunications infrastructure, Wall Street Journal reported.

China Telecom has denied allegations of posing a security threat and have maintained that they have worked in line with US regulations for over 20 years with offices in Chicago, Dallas, San Jose, and Virginia among others.

A China Telecom spokesperson told Reuters, "The FCC’s decision is disappointing. We plan to pursue all available options while continuing to serve our customers."

(With inputs from Al Jazeera and Wall Street Journal.)