The Federal Communications Commission just escalated its China crackdown by targeting HKT, one of Hong Kong's largest telecom operators. The agency launched proceedings to potentially bar the company from U.S. networks, citing national security concerns over its Chinese connections. This marks another significant blow to Asia-Pacific telecoms trying to maintain American market access.
The Federal Communications Commission just dropped the hammer on another major Asian telecom. HKT Trust and HKT Ltd, subsidiaries of Hong Kong giant PCCW, now face potential expulsion from U.S. networks after the agency launched formal revocation proceedings Wednesday.
The move sends shockwaves through Hong Kong's telecom sector, with HKT shares tumbling over 5% and PCCW falling 3.6% in Thursday trading. Markets are clearly spooked by what this could mean for other Asian telecoms with Chinese ties.
"The FCC's action on HKT today is an appropriate step towards ensuring the safety and integrity of our communications networks," FCC Chairman Brendan Carr said in a statement. "The FCC will continue to safeguard America's networks against penetration from foreign adversaries, like China."
The timing isn't coincidental. China Unicom, which holds an 18.4% stake in PCCW according to company filings, already lost its U.S. network access in 2022 over similar security concerns. Now the regulatory net is tightening around companies with even indirect Chinese connections.
HKT's current authorizations allow direct exchange of calls and data with U.S. carriers - a privilege that generates significant revenue for the Hong Kong operator. The company and PCCW derived about 13% of their 2024 revenues from regions outside greater China and Singapore, with HKT representing roughly 90% of the group's total revenue according to their annual reports.
This latest action fits Carr's broader strategy of systematically removing Chinese state-linked entities from American telecommunications infrastructure. The FCC has already expelled China Telecom, Pacific Networks, and ComNet from U.S. markets. Just last Friday, the agency announced that major U.S. online retailers had removed millions of listings for banned Chinese electronics.
The implications stretch beyond telecom into Hong Kong's business elite. PCCW is majority-owned by Richard Li, son of billionaire Li Ka-shing, whose family empire increasingly finds itself caught between Washington and Beijing. , another Li company, recently hit regulatory roadblocks expanding into mainland China, Bloomberg in July.
