“When Western companies pulled back from Iran after the government's bloody crackdown on its
citizens two years ago, a Chinese telecom giant filled the vacuum. Huawei Technologies Co. now dominates Iran's
government-controlled mobile-phone industry. In doing so, it plays a role in enabling Iran's state security network.
Huawei recently signed a contract to install equipment for a system at Iran's largest mobile-phone operator that
allows police to track people based on the locations of their cellphones, according to interviews with telecom
employees both in Iran and abroad, and corporate bidding documents reviewed by The Wall Street Journal. It also has
provided support for similar services at Iran's second-largest mobile-phone provider. Huawei notes that nearly all
countries require police access to cell networks, including the U.S. Huawei's role in Iran demonstrates the ease
with which countries can obtain foreign technology that can be used to stifle dissent through censorship or
surveillance. Many of the technologies Huawei supports in Iran—such as location services—are available on Western
networks as well. The difference is that, in the hands of repressive regimes, it can be a critical tool in helping
to quash dissent… This year Huawei made a pitch to Iranian government officials to sell equipment for a mobile news
service on Iran's second-largest mobile-phone operator, MTN Irancell. According to a person who attended the
meeting, Huawei representatives emphasized that, being from China, they had expertise censoring the news. The
company won the contract and the operator rolled out the service, according to this person. MTN Irancell made no
reference to censorship in its announcement about its ‘mobile newspaper' service. But Iran routinely censors the
Internet using sophisticated filtering technology. The Journal reported in June that Iran was planning to create its
own domestic Internet to combat Western ideas, culture and influence. In winning Iranian contracts, Huawei has
sometimes partnered with Zaeim Electronic Industries Co., an Iranian electronics firm whose website says its clients
include the intelligence and defense ministries, as well as the country's elite special-forces unit, the Islamic
Revolutionary Guards Corps. This month the U.S. accused a branch of the Revolutionary Guards of plotting to kill
Saudi Arabia's ambassador to the U.S. Iran denies the claim. Huawei's chief spokesman, Ross Gan, said, ‘It is our
corporate commitment to comply strictly with all U.N. economic sanctions, Chinese regulations and applicable
national regulations on export control. We believe our business operations in Iran fully meet all of these relevant
regulations.' William Plummer, Huawei's vice president of external affairs in Washington, said the company's
location-based-service offerings comply with ‘global specifications' that require lawful-interception capabilities.
‘What we're doing in Iran is the same as what we're doing in any market,' he said. ‘Our goal is to enrich people's
lives through communications.' Huawei has about 1,000 employees in Iran, according to people familiar with its Iran
operations. In an interview in China, a Huawei executive played down the company's activities in Iran's mobile-phone
industry, saying its technicians only service Huawei equipment, primarily routers. But a person familiar with
Huawei's Mideast operations says the company's role is considerably greater, and includes a contract for ‘managed
services'—overseeing parts of the network—at MTN Irancell, which is majority owned by the government. During 2009's
demonstrations, this person said, Huawei carried out government orders on behalf of its client, MTN Irancell, that
MTN and other carriers had received to suspend text messaging and block the Internet phone service, Skype, which is
popular among dissidents. Huawei's Mr. Plummer disputed that the company blocked such services. Huawei, one of the world's top makers of telecom equipment, has been trying to
expand in the U.S. It has met resistance because of concerns it could be tied to the Chinese government and
military, which the company denies. Last month the U.S. Commerce Department barred Huawei from participating in the
development of a national wireless emergency network for police, fire and medical personnel because of ‘national
security concerns.' A Commerce Department official declined to elaborate. In February, Huawei withdrew its attempt
to win U.S. approval for acquiring assets and server technology from 3Leaf Systems Inc. of California, citing
opposition by the Committee on Foreign Investment in the United States. The panel reviews U.S. acquisitions by
foreign companies that may have national-security implications. Last year, Sprint Nextel Corp. excluded Huawei from
a multibillion-dollar contract because of national-security concerns in Washington, according to people familiar
with the matter. Huawei has operated in Iran's telecommunications industry since 1999, according to China's embassy
in Tehran. Prior to Iran's political unrest in 2009, Huawei was already a major supplier to Iran's mobile-phone
networks, along with Telefon AB L.M. Ericsson and Nokia Siemens Networks, a joint venture between Nokia Corp. and
Siemens AG, according to MTN Irancell documents… As NSN and Ericsson pulled back, Huawei's business grew. In August
2009, two months after mass protests began, the website of China's embassy in Tehran reprinted a local article under
the headline, ‘Huawei Plans Takeover of Iran's Telecom Market.' The article said the company ‘has gained the trust
and alliance of major governmental and private entities within a short period,' and that its clients included
‘military industries.' The same month the Chinese embassy posted the article, Creativity Software, a British company
that specializes in ‘location-based services,' announced it had won a contract to supply a system to MTN Irancell.
‘Creativity Software has worked in partnership with Huawei, where they will provide first and second level support
to the operator,' the company said… One of the ultimate winners: Huawei. According to a Huawei manager in Tehran,
the company signed a contract this year to provide equipment for location-based services to MCCI in the south of
Iran and is now ramping up hiring for the project. One local Iranian company Huawei has done considerable business
with is Zaeim Electronic Industries. ‘Zaeim is the security and intelligence wing of every telecom bid,' said an
engineer who worked on several projects with Zaeim inside the telecom ministry.” (The Wall Street Journal.
“Chinese Tech Giant Aids
Iran,” 10/27/11) (http://online.wsj.com/article/SB10001424052970204644504576651503577823210.html)