Huawei to curb Iran operations

Tehran: Chinese telecommunications-equipment maker Huawei Technologies Co said it will scale back its business in Iran, where the company provides services to government-controlled telecom operators, following reports that Iranian police were using mobile-network technology to track down and arrest dissidents.

Shenzhen-based Huawei will "voluntarily restrict its business development there by no longer seeking new customers and limiting its business activities with existing customers," according to a statement on Friday on the company's website. It said the company was making the move due to the "increasingly complex situation in Iran." Company spokesmen declined to elaborate.

Pressure

The action follows a front-page Wall Street Journal article in October that documented how Huawei's business grew in Iran following a pullback by Western companies after the government's bloody crackdown on its citizens two years ago.

Iranian human-rights groups outside Iran say there are dozens of documented cases in which dissidents were traced and arrested through the government's ability to track the location of their cellphones — technology for which Huawei has provided support.

Activists hailed the company's decision, noting it was the first time a major Chinese company had decided to scale back its business in Iran. Until now, Iran has viewed its partnership with Chinese companies as a solid alternative to Western contracts.

"This is a significant milestone," said Mark Wallace, president of United Against Nuclear Iran and a former US ambassador to the United Nations. "For the first time a major Chinese business is pulling back from Iran in the face of mounting international scorn for Iran's brutal regime."

The New York-based group had been pressuring Huawei to leave Iran and had been communicating privately with the company for several weeks.

In addition, executives at Huawei's highest levels have been discussing for months whether to scale back in Iran, according to people familiar with the matter. Those discussions gained in intensity in recent weeks, several people said.

Eying Western markets

The rapidly-growing, private company was founded in 1987 by its chief executive, Ren Zhengfei, a former officer in China's People's Liberation Army.

Some Huawei executives in Shenzhen see operations in Iran as jeopardising expansion opportunities in the US and Europe, where the Chinese company has faced scepticism over its compliance procedures and dealings with countries that have pariah regimes. That was a driving factor behind the decision to dial back operations in Iran, a person familiar with the matter said.

The Chinese company has held talks with consultants, lawyers and lobbyists from the US on the issue.

Huawei, which has about 1,000 employees in Iran, said it plans to continue servicing its existing Iranian contracts.