China's ZTE to "curtail" business in Iran

Fri Mar 23, 2012 6:01pm EDT

A ZTE logo is pictured at the Mobile Asia Congress in Hong Kong November 17, 2011. REUTERS/Tyrone Siu

A ZTE logo is pictured at the Mobile Asia Congress in Hong Kong November 17, 2011.

Credit: Reuters/Tyrone Siu

(Reuters) - ZTE Corp, China's second-largest telecommunications equipment maker, said it will "curtail" its business in Iran following a report that it had sold Iran's largest telecom firm a powerful surveillance system capable of monitoring telephone and Internet communications.

Reuters reported Thursday that Shenzhen-based ZTE had signed a 98.6 million euro ($130.6 million) contract with the Telecommunication Co of Iran in December 2010 that included the surveillance system. (

"We are going to curtail our business in Iran," ZTE spokesman David Shu said in a telephone interview on Friday.

The article also reported that despite a longtime U.S. sales ban on tech products to Iran, ZTE's "Packing List" for the contract, dated July 24, 2011, included numerous American hardware and software products.

The U.S. makers of those products - which include Microsoft Corp, Hewlett-Packard Co, Oracle Corp, Cisco Systems Inc, Dell Inc, Juniper Networks Inc and Symantec Corp - all said they were not aware of the contract, and several said they were investigating the matter.

Shu said ZTE had decided "some time ago" to "shrink" its business in Iran, although he said the company had not yet decided on the details. "It's still being discussed," he said. He also said he did not know the reason for the decision. Until the Reuters article was published, ZTE spokesmen had declined to discuss the company's business in Iran with the news organization.

"Right now we cannot release more information," Shu said.

A spokesman for Iran's mission to the United Nations in New York could not immediately be reached for comment.

ZTE's action would mark another blow to Iran, which is under global sanctions because of allegations it is trying to develop nuclear weapons - something the country denies. Current sanctions have not targeted Iran's telecommunications sector. But several other major equipment makers previously have announced they we're going to cut back their business there.

They include European firms Ericsson and Nokia Siemens Networks, a joint venture between Nokia and Siemens, as well as China-based Huawei Technologies. The actions have not meant an immediate end to all Iranian business, however, as some firms continue to honor existing contracts that can last for years.

But on Friday, European Union governments agreed to ban the sale to Iran by European companies of telecommunications equipment that could be used for repression, including to monitor or intercept internet and telephone communications. The ban takes effect Saturday.

Shu described ZTE's business in Iran as much smaller than that of other equipment makers. Asked about the TCI contract, which included a large amount of networking gear along with the surveillance system, Shu said it was not yet completed. He said he did not know how it might be affected by ZTE's decision to curtail its business in Iran.

TCI is owned by the Iranian government and a private consortium with reported ties to Iran's elite special-forces unit, the Islamic Revolutionary Guards Corps. The company has a near monopoly on Iran's landline telephone services, and much of Iran's internet traffic is required to flow through its network.

TCI officials in Tehran either didn't respond to requests for comment or could not be reached.

ZTE is publicly traded, but its largest shareholder is a Chinese state-owned enterprise. It says it sells equipment in more than 140 countries and reported annual revenue of $10.6 billion in 2010.

Like most countries, including the United States, Iran requires telephone operators to provide law enforcement authorities with access to communications. Human rights groups say they have documented numerous cases in which the Iranian government tracked down and arrested critics by monitoring their telephone calls or internet activities.

Another ZTE spokesman said Thursday, "ZTE always complies strictly with all U.N. regulations, as well as local laws and regulations of the country we operate" in.

(Reporting by Steve Stecklow in Acton, MA, additional reporting by Justyna Pawlak in Brussels; Editing by Michael Williams and Claudia Parsons)

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Comments (4)
gregbrew56 wrote:
Should me and my other neighbors prevent one household on our block from buying groceries and a new cell phone because they *might be considering* buying a gun and the crazy uncle that lives their threatened to kill my dog?

Think about it a bit.

Mar 24, 2012 1:51am EDT  --  Report as abuse
emu wrote:
To gregbrew56:
They aren’t considering buying a gun, but, to stay with your neighbour analogy, enough TNT to blow up the whole neighbourhood.
And, you take their “consideration” serious because they belive they’ll go to heaven for it, so it doesn’t matter if they die in that explosion.

Mar 24, 2012 7:29am EDT  --  Report as abuse
mgunn wrote:
More like WE have enough TNT to blow up the whole neighborhood plus guns plus we surround them and pick on them because they don’t fellatio us. We call them names and make up lies. We’ve done it before to the house next door. They try to develop a single stick of dynamite to defend.

The nuke is a defensive equalizer against a proven bully. Get inspected and shown to have none, get attacked anyway and die via hanging (Saddam). Give up voluntarily and get attacked anyway by proxies and die via sodomy (Gaddafi). Develop the single stick of dynamite and live and die a natural death (Kim Jong Il). Maybe, just maybe, the one who attacks under false pretexts causing others to scramble to defend is the crazy one.

Mar 24, 2012 11:15am EDT  --  Report as abuse
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