|Chinese Tech Giant Aids Iran|
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.
Iran beefed up surveillance of its citizens after a controversial 2009 election spawned the nation's broadest antigovernment uprising in decades. Authorities launched a major crackdown on personal freedom and dissent. More than 6,000 people have been arrested and hundreds remain in jail, according to Iranian human-rights organizations.
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, 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."
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.
Iran's telecom market, which generated an estimated $9.1 billion in revenue last year, has been growing significantly, especially its mobile-phone business. As of last year, Iran had about 66 million mobile-phone subscribers covering about 70% of the population, according to Pyramid Research in Cambridge, Mass. In contrast, about 36% of Iranians had fixed-line phones.
As a result, mobile phones provide Iran's police network with far more opportunity for monitoring and tracking people. Iranian human-rights organizations 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.