HKT to Exit US Market by 2027 Under FCC Consent Decree

Hong Kong's largest telecom operator, HKT, must end all domestic and international telecom services in the United States by September 1, 2027, under a consent decree agreed with the Federal Communications Commission.

The FCC ordered the company in October last year to show cause why it should not revoke the right of HKT and its subsidiaries to provide services in the US. Reuters now reports that, under the settlement, HKT has agreed to stop international and domestic services to and within the US. The telco must file a discontinuation application with the FCC within 30 days and shut its US operations entirely by the September 2027 deadline.

HKT has made no public comment on the decree. A spokesperson told the South China Morning Post that the company remained "fully compliant with all applicable regulatory requirements."

Why did the FCC act against HKT?

The order is the latest in a seven-year run of FCC actions against China-based carriers on national security and law enforcement grounds. The commission has previously placed prohibitions on China Mobile, China Telecom and China Unicom, arguing that the US operations of all three were vulnerable to exploitation and influence by the Chinese government.

In HKT's case, the FCC cited the operator's links to the Chinese state through China Unicom. Beijing-controlled Unicom holds an 18% stake in PCCW, which in turn owns 52% of HKT and serves as its majority shareholder.

PCCW is controlled by Richard Li, son of the 98-year-old Hong Kong tycoon Li Kai-shing. The elder Li heads CK Hutchison Whampoa, the controlling shareholder of Hutchison Three, Hutchison Asia Telecom and Hutchison Telecom.

How much does the withdrawal actually cost HKT?

In commercial terms, the exit is largely symbolic. HKT's income overwhelmingly derives from its Hong Kong broadband, mobile and enterprise services, which the FCC order does not touch. The impact will instead fall on PCCW Global, the group's international operating arm, which offers international services to and from the US as well as domestic interstate services across 30 states, according to the commission.

Investors appeared to read the news as manageable. HKT's Hong Kong-listed shares declined 1.2% on Monday.

How has Beijing responded?

China's Ministry of Commerce called on the FCC to withdraw the order. It complained that the commission had ignored representations from Chinese officials and said the move was "severely undermining" China-US trade relations.

The protest is unlikely to change the outcome. The consent decree follows the same regulatory logic the FCC applied to China Mobile, China Telecom and China Unicom, none of which succeeded in reversing their exclusions from the US market.

For HKT, the practical work now begins with the 30-day application to the FCC, while PCCW Global faces roughly two years to wind down customer contracts across 30 states before the September 1, 2027 deadline.