The US Federal Communications Commission (FCC) has banned China Telecom from operating in America over national security concerns, in a move that means the company must now discontinue its services in the country within 60 days.
The regulator claimed in a statement on Tuesday that China Telecom "is subject to exploitation, influence, and control by the Chinese government and is highly likely to be forced to comply with Chinese government requests without sufficient legal procedures subject to independent judicial oversight".
The FCC argued that the firm being controlled by Beijing raises "significant national security and law enforcement risks by providing opportunities" for the company and the Chinese government "to access, store, disrupt, and/or misroute US communications".
This, in turn, allows the firm and the Chinese government "to engage in espionage and other harmful activities against the United States", according to the statement.
A China Telecom America spokesperson responded by describing the FCC's decision as "disappointing", pledging that the company would "pursue all available options while continuing to serve our customers".
Beijing-based China Telecom is one of the country's largest phone companies and the second-largest wireless carrier in China with 370 million subscribers, according to a 22 October securities filing issued by the company. Along with China Mobile and China Unicom, it reportedly dominates the Chinese telecommunications market.
The FCC decision, which ends China Telecom's nearly 20-year operations in the US, comes after the country's Justice Department reportedly threatened to terminate China Telecom's American dealings in April 2020.
The Justice Department purportedly argued at the time that US government agencies "identified substantial and unacceptable national security and law enforcement risks associated with China Telecom's operations".
US regulators earlier cracked down on other Chinese telecoms, including tech giant Huawei.
The White House claims the company is collaborating with the Chinese government to allow it to spy on those who use the telecom titan's equipment, allegations that have been rejected by both Beijing and Huawei.