US weighs ban on Hong Kong tycoon Richard Li’s phone firm PCCW as China tensions rise

[WASHINGTON] The US took steps to block one of Hong Kong’s largest phone companies from accessing domestic telecom networks, citing national security concerns, a move that intensifies the fallout on the city’s tycoon Li Ka-shing’s family from US-China tensions.

The Federal Communications Commission (FCC) called on HKT (International) and its subsidiaries, which are controlled by Richard Li’s PCCW, to “explain why the FCC should not commence revocation proceedings against them”.

HKT currently has permission to interconnect with US networks, allowing calls and data to be exchanged directly. The FCC noted in its Wednesday (Oct 15) statement that HKT is an affiliate of the US unit of China Unicom Hong Kong, the provider that lost its American network access in 2022. China Unicom owns 18.4 per cent of PCCW.

The move signals that the US’ national security lens is widening to include Hong Kong-based companies once considered neutral in the rivalry between the US and China. It comes as FCC chairman Brendan Carr has made securing American networks from foreign influence a major priority, with a number of Chinese companies losing their access in recent years.

PCCW’s business will not be significantly impacted by a loss of access to the US market, as only 13.7 per cent of its revenue came from outside of Greater China and Singapore in 2024, according to the company’s annual report. Shares hardly reacted, dipping as much as 1.5 per cent in Thursday morning trading.

But the renewed US scrutiny is another setback for Richard Li, Li Ka-shing’s younger son, who has painstakingly built up a telecoms, streaming and insurance empire separate from his father’s.

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Li Ka-shing’s CK Hutchison Holdings is embroiled in a politically sensitive sale of global ports – including two in Panama – to a BlackRock-backed consortium, a deal that has become a proxy for the US-China rivalry.

Though Richard Li’s companies have no official relation to CK Hutchison, talks to expand his insurance business FWD Group into the mainland stalled after Beijing reacted angrily to the ports sale plan, Bloomberg reported in July.

Given the low contribution of US operations to total revenue, PCCW is unlikely to face major valuation downgrades, said Gerald Gan, deputy chief investment officer at Reed Capital Partners in Singapore.

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“However, it does affect the longer-term strategy for the company, as it continues to be sandwiched in the fight between the world’s two largest economies,” said Gan, who called the FCC statement “a fresh retaliatory move from the US in this new trade war”.

The FCC did not immediately respond to a request for comment on the extent of HKT’s operations in the US. PCCW also did not immediately respond to requests for comment outside of official work hours.

President Donald Trump said on Wednesday that he saw the US as locked in a trade war with China. Washington and Beijing have agreed to a series of 90-day truces since earlier this year, with the next deadline looming in November.

“The FCC’s action on HKT today is an appropriate step towards ensuring the safety and integrity of our communications networks,” Carr said. “The FCC will continue to safeguard America’s networks against penetration from foreign adversaries, like China.” BLOOMBERG