ZTE 'not told' about FBI's Iran sales probe

Shanghai Daily, July 18, 2012

ZTE Corp, the subject of an FBI probe into alleged sales of banned US computer equipment, said Tuesday it had not received any notification from US authorities about its business with Iran.

Also yesterday, a Ministry of Commerce spokesman said China hoped Shenzhen-based ZTE, the country's second biggest telecommunications equipment maker, would be given "fair and proper" treatment in the probe.

ZTE is said to have sold to Iran's largest telecoms firm a powerful surveillance system capable of monitoring landline, mobile and Internet communications, according to the Smoking Gun website.

"We haven't received any notifications from the FBI or other authorities therefore we can't give comments on that issue," David Dai, a ZTE spokesman, told Shanghai Daily yesterday.

ZTE has provided standard communications and network solutions to Iran on a small scale, but it has restricted its business practices in the country since 2011 and no longer seeks new customers there, the company said previously.

Ministry spokesman Shen Danyang said that groundless criticism of China's relations with Iran was unfair.

"China, like many other countries in the world, has kept normal, open and transparent relations with Iran and we think these relations do not go against the rules of the United Nations and should not receive groundless criticism from other countries."

ZTE, the world's fifth-largest telecom equipment maker, and Shenzhen-based Huawei Technologies, the No. 2 player globally, are China's leading telecommunications firms and challengers to long-term market leaders such as Ericsson and Alcatel-Lucent.

ZTE, which operates in more than 140 countries and regions, has been the subject of national security concerns in the United States and India, where it has been trying to expand operations.

Shares in Shenzhen-listed ZTE plunged about 30 percent in the past two weeks after reports of the FBI probe surfaced.

Global economic uncertainty, which has forced overseas carriers to cancel or delay network investment plans, and fierce competition in the entry-level smart phone market, have eroded ZTE's profit margins, said Chen Yunhong, a Sinolink Securities analyst.