The United States regulatory bodies have taken steps to prevent a major Hong Kong telecom from linking into U.S. networks, pointing to threats to national security as the main issue.

On Wednesday, the U.S. Federal Communications Commission (FCC) disclosed that it has begun procedures that might restrict HKT Trust and HKT Ltd and its subsidiaries from connecting with U.S. networks, amplifying fears over its connections to China.

The FCC has demanded that HKT, which operates under the umbrella of the tech conglomerate PCCW, provide reasons to retain its operational permits. These permits currently allow the company to directly exchange communications with American service providers.

China Unicom, holding approximately 18.4% of PCCW shares, previously had its access to U.S. networks revoked in 2022, stemming from similar security concerns.

“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 Hong Kong-listed shares of HKT fell more than 5%, while PCCW fell 3.6% in Thursday trading.

According to their 2024 annual reports, HKT and PCCW derived about 13% of their 2024 revenues from regions outside greater China and Singapore, though specific countries weren’t detailed. HKT made up about 90% of the group’s total revenue.

HKT told CNBC in a statement that it was carefully reviewing the FCC’s order. “We will appropriately respond to the relevant authorities and are committed to doing our utmost to fulfill our responsibilities to all stakeholders,” it said.

Under the leadership of Carr, the FCC has expanded efforts to expel Chinese state-linked entities, including China Telecom, Pacific Networks and ComNet, from U.S. markets.

On Friday, the FCC announced that the major U.S. online retail websites had removed millions of listings for banned Chinese electronics as part of its broader China crackdown.

PCCW is majority-owned by Hong Kong tycoon Richard Li, son of billionaire Li Ka-shing, who has increasingly found his businesses caught in the crossfire of the U.S.-China trade tensions.

FWD Group, owned by Li’s Pacific Century Group, recently faced hurdles expanding into mainland China amid backlash from regulators in China, Bloomberg reported in July.

In March, Beijing reportedly instructed state-owned firms to pause new deals with businesses linked to Li Ka-shing and his family after their conglomerate CK Hutchison agreed to transfer stakes in over 40 global ports — including two in Panama — to a BlackRock-led consortium. 

The ports deal stalled after Beijing objected to the exclusion of Chinese investors, with CK Hutchison indicating it no longer plans to comeplete the transaction in 2025.

The FCC’s latest move against HKT also comes as U.S. President Donald Trump escalates his trade war with China.