Nokia Siemens to Reduce Iran Ties

WSJ

The executive board of network-equipment vendor Nokia Siemens Networks said it has decided not to take on any new business in Iran and will gradually reduce its existing commitments, effective Jan. 1, 2012.

In a letter to its staff in Iran, the Helsinki-based joint venture cited toughening global sanctions against Iran, which it said "make it almost impossible for Nokia Siemens Networks to do business with Iranian customers." A copy of the letter was obtained by The Wall Street Journal.

"We will continue to support our existing customers and honor our contracts for as long as we are able to within the limits of any existing or new sanctions and within all applicable laws," the letter stated.

The company—a joint venture between Nokia Corp. and Siemens AG—has been scaling back its business in Iran. In June 2010 it decided to only accept contract extensions with existing contracts.

The letter also said that NSN had "a high degree of certainty" that Finland and Germany would not renew its export contracts to Iran because of "international pressure." And it noted that "the sanctions on all international banks and other financial institutions" have meant NSN has had trouble moving money out of Iran for about a year.

NSN came under fire in 2009 after Siemens disclosed that it had provided Iran's largest telecom, government-owned Telecommunications Co. of Iran, with a monitoring center capable of intercepting and recording voice calls on its mobile networks. NSN had also provided network equipment to TCI's mobile-phone operator, as well as MTN Irancell, that permitted interception.

NSN sold its global monitoring-center business in March 2009. The company also established a human-rights policy to reduce the potential for abuse of its products.

NSN announced last month that it will cut nearly a quarter of its work force in a broad restructuring to focus on mobile broadband. Rajeev Suri, NSN's chief executive, said the company would cut 17,000 jobs globally, or 23% of its 74,000 employees.

Last week, 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.

Shenzhen-based Huawei said it 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 Friday on the company's website. It said it was making the move because of the "increasingly complex situation in Iran." Company spokesmen declined to elaborate.

In recent months, international pressure against Iran has intensified because of a continued standoff between the Islamic Republic and the West over its nuclear program. The West says Iran is pursuing a military nuclear program, but Iran rejects the claim, saying its nuclear program is for peaceful purposes.

Write to Steve Stecklow at [email protected]

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