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. FWD Group, another Li company, recently hit regulatory roadblocks expanding into mainland China, Bloomberg reported in July.
The pressure escalated dramatically in March when Beijing reportedly instructed state-owned firms to pause new deals with Li Ka-shing family businesses after their conglomerate CK Hutchison agreed to transfer stakes in over 40 global ports to a BlackRock-led consortium. That deal stalled after Beijing objected to excluding Chinese investors.
Neither PCCW nor HKT responded to requests for comment, but they now have a critical decision ahead. The companies must justify why their U.S. authorizations should remain intact - a process that's proven unsuccessful for other Chinese-linked telecoms facing similar scrutiny.
The FCC's aggressive stance comes as President Trump escalates his trade war with China, signaling that telecom infrastructure will remain a key battleground. For Hong Kong companies trying to maintain global operations while navigating Beijing's influence, the regulatory environment is becoming increasingly hostile on both sides of the Pacific.
The FCC's move against HKT signals a new phase in U.S.-China tech tensions, where even Hong Kong companies with indirect Chinese ties face regulatory exile. As Washington tightens its grip on telecom infrastructure and Beijing pushes back against Western consortium deals, companies in the middle are finding their global ambitions increasingly constrained. The 30-day response window will test whether diplomatic solutions still exist, or if this regulatory cold war will continue fracturing the global telecom landscape.
