Chinese Telecommunications Company Forced to Leave Canada Due to Security Concerns

A worker waits for visitors to the China Mobile booth in Beijing, China, on Sept. 5, 2021. (Ng Han Guan/AP Photo)

A Chinese telecommunications company will cease its operations in Canada on Jan. 5 to comply with a federal government order based on security considerations.

State-owned China Mobile’s service CMLink recently announced its departure to its customers.

The company, which has the most subscribers in the world at 942 million, offered mobile plans in Canada but does not have any wireless infrastructure in the country and was relying on Telus’s network.

CMLink told its customers Telus would be in touch on or after Jan. 5 about porting-in offers; otherwise, their current mobile plan would be available free of charge until March 31, 2022, after which all service will cease.

The company is being expelled on national security grounds, with the federal government having ordered the carrier in August to wind up or divest its business.

An extension had been granted, but on Dec. 7 the federal court refused to put a hold on the order.

Chief Justice Paul Crampton said in a ruling the harms to public interest by China Mobile are “significantly greater” than the harms the company said it would face if the order wasn’t stayed.

The federal government had informed the Chinese company in January 2021 its operations were under review since they could be leveraged for foreign interference and compromise critical infrastructure.

China Mobile has also encountered trouble south of the border.

In May 2019, the U.S. Federal Communications Commission (FCC) denied China Mobile’s application to provide telecommunications services between the United States and foreign destinations.

The FCC said that due to control of the company by Beijing, “grant of the application would raise substantial and serious national security and law enforcement risks that cannot be addressed through a mitigation agreement between China Mobile and the federal government.”

The company was also delisted from the New York Stock Exchange earlier this year, along with its peers China Unicom and China Telecom, following an executive order by former U.S. president Donald Trump preventing Chinese companies with ties to the military to sell securities in the United States.

Now China Mobile is about to enter the Shanghai Stock Exchange and its initial public offering (IPO) is expected to raise close to $9 billion.

As for Chinese telecommunications giant Huawei, the Canadian government has yet to announce if it will ban its 5G equipment from Canada’s wireless infrastructure.

Canada’s allies in the Five Eyes have either banned or plan to phase out Huawei from their 5G networks.

The Canadian Press contributed to this report.