People walk past a PCCW register Hong Kong.
Mike Clarke | AFP | Getty Images
Regulators within the U.S. have moved to dam considered one of Hong Kong’s largest telecommunications firms from accessing domestic networks, citing national security concerns.
The U.S. Federal Communications Commission announced on Wednesday that it had initiated proceedings to potentially bar HKT Trust and HKT Ltd and its subsidiaries from interconnecting with American networks, escalating concerns over its ties to China.
The federal government agency asked HKT, which is a subsidiary of data and communication technology giant PCCW, to justify why its authorizations mustn’t be revoked. HKT’s current hold permits allowing direct exchange of calls and data with U.S. carriers.
China Unicom, which owns about 18.4% of PCCW, lost its own U.S. network access in 2022 attributable to similar concerns.
“The FCC’s motion on HKT today is an appropriate step towards ensuring the security and integrity of our communications networks,” FCC Chairman Brendan Carr said in an announcement.
“The FCC will proceed to safeguard America’s networks against penetration from foreign adversaries, like China.“
The Hong Kong-listed shares of HKT fell greater than 5%, while PCCW fell 3.6% in Thursday trading.
Share price of HKT and PCCW
In line with their 2024 annual reports, HKT and PCCW derived about 13% of their 2024 revenues from regions outside greater China and Singapore, though specific countries weren’t detailed. HKT made up about 90% of the group’s total revenue.
HKT told CNBC in an announcement that it was rigorously reviewing the FCC’s order. “We are going to appropriately reply to the relevant authorities and are committed to doing our utmost to meet our responsibilities to all stakeholders,” it said.
Under the leadership of Carr, the FCC has expanded efforts to expel Chinese state-linked entities, including China Telecom, Pacific Networks and ComNet, from U.S. markets.
On Friday, the FCC announced that the foremost U.S. online retail web sites had removed tens of millions of listings for banned Chinese electronics as a part of its broader China crackdown.
Caught in U.S.-China trade tensions
PCCW is majority-owned by Hong Kong tycoon Richard Li, son of billionaire Li Ka-shing, who has increasingly found his businesses caught within the crossfire of the U.S.-China trade tensions.
FWD Group, owned by Li’s Pacific Century Group, recently faced hurdles expanding into mainland China amid backlash from regulators in China, Bloomberg reported in July.
In March, Beijing reportedly instructed state-owned firms to pause latest deals with businesses linked to Li Ka-shing and his family after their conglomerate CK Hutchison agreed to transfer stakes in over 40 global ports — including two in Panama — to a BlackRock-led consortium.
The ports deal stalled after Beijing objected to the exclusion of Chinese investors, with CK Hutchison indicating it not plans to comeplete the transaction in 2025.
The FCC’s latest move against HKT also comes as U.S. President Donald Trump escalates his trade war with China.
