The US Federal Communications Commission said that it's moving to revoke HKT's operating authority in the US due to national security concerns, to which the telecom company responded by trying its best to fulfill its responsibilities to all stakeholders.
Although an analyst said it's more like an isolated case, a professor cautions that other Hong Kong firms operating in the US could be targeted in the future.
The US telecom regulator issued an order to show cause directing HKT and its subsidiaries to explain why the FCC should not commence revocation proceedings, citing its affiliation with China Unicom Americas. Concurrently, China Unicom indirectly holds HKT through its 18 percent stake in PCCW, which owns 52 percent shares of the telecom.
In a response yesterday, HKT said it is carefully reviewing the FCC's order to fully understand the situation, while staying committed to doing its utmost to fulfill its responsibilities to all stakeholders.
The FCC noted that it will continue to safeguard America's networks against penetration from foreign adversaries, like China.
As Sino-US trade relations continue to worsen, Hong Kong companies operating in the US could be used as bargaining chips in the ongoing trade dispute, said Billy Mak Sui-choi, an associate professor at Hong Kong Baptist University's department of accountancy economics and finance.
The shares of HKT and PCCW declined 4.37 percent and 2 percent respectively yesterday. Amid ongoing trade uncertainty, the market sentiment will further dampen by such a case, said Kenny Ng Lai-yin, securities strategist at Everbright Securities International.
If the order is finalized, the FCC would prevent HKT from providing international and domestic telecom services to and within the US.
However, the revocation is expected to have a limited impact on HKT’s operations, as its international business accounts for only a single-digit percentage of its total revenue, said Ng.
In recent years, Washington has taken a series of actions against China's telecom and tech industries.
Previously, the FCC banned China Mobile Americas, China Telecom Americas, China Unicom Americas, Pacific Networks, and its wholly owned subsidiary ComNet for their US operations.
