People passing by the PCCW sign in Hong Kong.
Mike Clark | AFP | Getty Images
U.S. regulators have moved to block Hong Kong’s largest telecommunications company from accessing its domestic network, citing national security concerns.
The Federal Communications Commission announced Wednesday that it has begun proceedings for a potential ban. HKT Trust and HKT Ltd and its subsidiaries have refused to interconnect with US networks, raising concerns about its relationship with China.
The government agency questioned HKT, a subsidiary of the information and communications technology giant. PCCWto justify why the authorization should not be revoked. HKT’s current hold allows calls and direct exchange of data with US carriers.
china unicomowns about 18.4% of PCCW, but lost access to its U.S. network in 2022 due to similar concerns.
“The FCC’s action against HKT today is an appropriate step toward ensuring the security and integrity of our communications networks,” FCC Chairman Brendan Carr said in a statement.
“The FCC will continue to protect America’s networks from intrusion by foreign adversaries like China.”
Hong Kong-listed HKT shares fell more than 5%. PCCW It fell 3.6% in Thursday trading.
HKT and PCCW stock prices
According to their 2024 annual report, HKT and PCCW will derive approximately 13% of their 2024 revenue from regions outside Greater China and Singapore, although details about specific countries are not disclosed. HKT accounted for approximately 90% of the group’s total revenue.
Neither PCCW nor HKT immediately responded to CNBC’s requests for comment.
Under Kerr’s leadership, the FCC has expanded its efforts to exclude Chinese state-owned enterprises such as China Telecom, Pacific Networks and Comnet from the U.S. market.
The FCC announced Friday that major U.S. online retail sites have removed millions of listings for banned Chinese-made electronics as part of a broader crackdown on China.
Caught up in US-China trade friction
PCCW is majority-owned by Hong Kong businessman Richard Li, son of billionaire Li Ka-shing, whose business has become increasingly caught up in the crossfire of US-China trade tensions.
FWD groupThe company, owned by Mr. Li’s Pacific Century Group, has recently faced difficulties expanding into mainland China following pushback from Chinese regulators, Bloomberg reported in July.
In March, the Chinese government reportedly told state-owned companies to suspend new business with companies linked to Li Ka-shing and his family after conglomerate CK Hutchison agreed to transfer stakes in more than 40 ports around the world, including two in Panama, to a BlackRock-led consortium.
The port deal stalled after the Chinese government objected to excluding Chinese investors, with CK Hutchison indicating there were no more plans to complete the deal in 2025.
The FCC’s latest action against HKT comes as US President Donald Trump escalates his trade war with China.
