US reportedly launches investigation into China Telecom, China Mobile and China Unicom

Three sources familiar with the matter told Reuters that the Commerce Department is running an investigation and has subpoenaed the Chinese telcos and completed ‘risk-based analyses’ of China Mobile and China Telecom, but are not as advanced in their probe of China Unicom.

The sources also said that regulators have not yet made decisions about how to address the potential threat but “equipped with the authority to probe internet services sold into the US by companies from "foreign adversary" nations, regulators could block transactions allowing them to operate in data centers and route data for internet providers.”

The report further cites ‘experts and sources’ as saying blocking key transactions “could degrade the Chinese firms' ability to offer competitive American-facing cloud and internet services to global customers, crippling their remaining U.S. businesses.”

The report claims that China Telecom has 8 American Points of Presence (PoPs) at internet exchange points, and that the three firms “still have a small presence in the United States, for example, providing cloud services and routing wholesale US internet traffic”.

Some of the anonymous sources claim regulators fear that the companies could access personal information stored in their clouds and provide it to the Chinese government or disrupt Americans' access to it, and that Commerce Department officials are particularly concerned about one data centre that is part owned by China Mobile in California's Silicon Valley, according to Reuters.

The Chinese Embassy in Washington said it hopes the United States will "stop suppressing Chinese companies under false pretexts," and that China will continue to defend the rights and interests of Chinese companies, says the Reuters report.

Of course it goes without saying this latest move can be seen in the context of wider US bans on Chinese telecoms and tech entities, the most notable being the banning of Huawei kit from networks.

US restrictions against these three telcos in particular is nothing new either - back in 2019 the FCC denied China Mobile a licence to operate telco services in the US which was applied for in 2011.  

Then in 2021 the New York Stock Exchange delisted the stocks of China Mobile, China Telecom and China Unicom in compliance with Executive Order 13959 – for which the relevant page on the White House website our reporting at the time linked to no longer seems to be active.