ZTE Defends Iran Position



9:00 AM -- While its fellow Chinese vendor Huawei Technologies Co. Ltd. is embroiled in a brouhaha in Australia, ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) is encountering a few issues of its own over its operations in Iran. (See Australia's (Safe) Bet Against Huawei and Huawei Barred From NBN.)

As the Iranian government prepares for new talks with the P5+1 group of countries (China, France, Germany, Russia, U.K. and U.S.) over its nuclear plans (see this AFP report), pressure group United Against Nuclear Iran (UANI) has called on ZTE to "end its business in Iran, and stop enabling the Iranian regime's surveillance activities."

UANI, in a press release issued to raise awareness of the issue, highlighted the "irresponsible" supply of deep packet inspection (DPI) technology to the Telecommunication Company of Iran (TCI) and called for ZTE to "immediately and completely end its business in Iran." UANI also "requested" a reply to its demands by April 3.

ZTE responded more swiftly than that. Here's what it says:

    There has been some recent media coverage concerning ZTE and the company's business dealings with Iran. ZTE would like to clarify its position in regard to this matter.

    ZTE operates in over 140 countries and regions around the world. The Company always respects and complies with international and local laws wherever it operates.

    ZTE has provided standard communications and network solutions to Iran on a small scale. However, due to local issues in Iran and its complicated relationship with the international community, ZTE has restricted its business practices in the country since 2011. ZTE no longer seeks new customers in Iran and limits business activities with existing customers.

    ZTE has strict internal audit and compliance policies in place. The Company has a dedicated import and export control committee chaired by a senior executive. It also provides internal and external import and export compliance training to its employees.


ZTE isn't the only company to have come under the spotlight regarding business in Iran. DPI vendor Allot Ltd. (Nasdaq: ALLT) responded to criticism regarding its sales channel strategy in December 2011, while earlier that month UANI "applauded" Huawei for its policy over business in Iran following a campaign similar to its current lobbying of ZTE. (See Allot Responds to Iran Article, UANI Applauds Huawei, Huawei Limits Its Iran Ops and Should Huawei Do Business in Iran?.)

And in 2009, Nokia Networks came under enormous pressure regarding historical business activities in the country. (See NSN Has a Bad Day.)

Whether ZTE's statement is enough to satisfy UANI and others remains to be seen, but one can only hope that the upcoming international talks lead to a situation whereby pressure and the threat of sanctions no longer need to be considered.

— Ray Le Maistre, International Managing Editor, Light Reading

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