Thursday, 27 January 2022

China Telecom told to cease US operations in January

by Harry Baldock, Total Telecom
Friday 03 December 21

The company will be forced to leave the US market following a ban in October, with a recent appeal falling on deaf ears

Back in October, the US Federal Communications Commission (FCC) announced that it had terminated China Telecom’s authority to provide communications services in the US.  The decision was largely based on classified information supplied by US national security agencies, who said that China Telecom had the capability to access and disrupt US communications and could therefore potentially engage in espionage…

Back in October, the US Federal Communications Commission (FCC) announced that it had terminated China Telecom’s authority to provide communications services in the US. 

The decision was largely based on classified information supplied by US national security agencies, who said that China Telecom had the capability to access and disrupt US communications and could therefore potentially engage in espionage. Furthermore, as a state-controlled company, China Telecom could in fact be compelled to do so by the Chinese government. 

China Telecom immediately launched a legal appeal against the ban, repeatedly arguing that it was being illegally discriminated against.

Now, however, that appeal has failed, with China Telecom told it must cease all of its US operations by early January.

China Telecom has operated in the US since 2002. A ban on the company was first proposed back in 2020 under the Trump Administration, with China Telecom, China Unicom, Pacific Networks, and ComNet all told they would have to prove they were not national security risks. 

With China Telecom’s ban now upheld, it seems that the FCC will now turn its attention to Unicom, Pacific Networks, and ComNet.

“We are moving expeditiously to complete our security reviews for similarly situated carriers like China Unicom Americas, Pacific Networks, and ComNet,” said FCC chair Jessica Rosenworcel back in October. 

Naturally, the ban of China Telecom will be a painful blow, not only for the company, but also for Chinese national pride. Ultimately, however, they are unlikely to care that much; China Telecom’s US revenues are estimated at around $200 million, a tiny fraction of their global annual revenues that total over $60 billion. 

In fact, it has been Latin America that has become one of the main focusses for the company in recent months, with China Telecom saying ealier in the year that they would expand their points of presence on the South American continent to new locations in Brazil, Argentina, Chile, Peru, Peru, Panama, and Mexico over the next three years. 

 

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