The Swedish firm Ericsson is working with Iran's largest mobile telecom
operator to expand its network and has promised to support another
Iranian mobile carrier until 2021, according to interviews and an
internal company document.
The involvement of Ericsson, the world's
largest mobile network equipment maker, comes at a time when many
Western companies have stopped doing business in Iran because of
international sanctions or concerns about damage to their reputations.
While Ericsson argues in the internal document that telecommunications
are a "basic humanitarian service," Iranian human rights groups say
Iran's regime has used the country's mobile-phone networks to track and
monitor dissidents.
Though standard telecommunications equipment
does not fall under sanctions, four major equipment makers, including
Ericsson, have all said they plan to reduce their Iranian business. They
have said they will not seek new contracts, though they will honour
existing ones.
Fredrik Hallstan, a spokesman for Ericsson,
confirmed the company is currently working on a new expansion project
for Mobile Communication Co of Iran (MCCI), but said the venture, which
the carrier calls Phase V, is covered under a contract Ericsson signed
in 2008. "We have not extended any agreements ... with MCCI and we have
no plans to do so either," he said.
He declined to discuss the
nature of the work Ericsson is undertaking, its value or how the company
will be paid. Foreign firms have had difficulty taking funds out of
Iran because of tightening economic sanctions on Iranian financial
institutions. The sanctions are designed to deter Iran from developing
nuclear weapons; Iran says its nuclear programme is aimed purely at
producing domestic energy.
Finnish-German venture Nokia Siemens
Networks, which had worked previously with MCCI, is not participating in
the expansion project, the company said. A spokesman for China's ZTE
Corp, another telecom equipment maker that does business in Iran, said:
"As far as I know, ZTE is not involved in the MCCI network expansion
project."
A spokesman for Huawei Technologies Co Ltd, the Chinese
telecom supplier, did not confirm or deny that his company is involved.
In a statement, he said Huawei is "limiting our business activities with
existing (Iranian) customers." But he added: "For communications
networks that have been delivered or are under delivery to customers,
Huawei will continue to provide necessary services to ensure
communications for Iran's citizens."
Hallstan said Ericsson's
promise to continue supporting a second Iranian mobile operator, MTN
Irancell, for many years falls under a 2006 contract. MTN Irancell is
Iran's second largest mobile carrier.
The sensitivity of
Ericsson's work in Iran is made clear in a letter written by an
executive of the company. On January 19, an Ericsson vice president
wrote to MTN Group, a South African company that holds a 49 percent
stake in MTN Irancell. In a letter marked confidential, the executive
stated that Ericsson undertakes "to not take actions that could
unnecessarily bring any extra press scrutiny and that could potentially
destabilise the working arrangements in Iran," according to a copy
reviewed by Reuters.
The letter confirmed that Ericsson intends to
"continue supporting the MTN Irancell operation and future network
expansions ... based on Ericsson's existing supply contracts ... as long
as it is feasibly possible to do business in Iran."
It also
confirmed one support contract "until 2021." And it stated Ericsson
would continue working with "relevant international organisations to
argue that telephony is a basic humanitarian service."
The letter
concluded: "Ericsson is looking forward to supporting MTN and
strengthening our relationship by working closely together to resolve
any practical obstacles and challenges facing the MTN Irancell
business."
The executive, who at the time of the letter was in
charge of Ericsson's business with MTN, did not respond to a request for
comment. MTN declined to comment.
Hallstan said the letter "is
correct" in that Ericsson will continue to support MTN Irancell under an
agreement it signed in 2006 when the mobile operator launched.
"Agreements in the telecommunications industry are very long lasting,"
he said. "A service support obligation lasting more than 10 years is
certainly not unusual in this industry."
The nature of MCCI's
latest network expansion remains unclear. The company, a unit of
Telecommunication Co of Iran, was the country's first mobile phone
operator and has more than 44 million subscribers, according to its
website. It has undergone a series of network expansions.
In
February 2011, MCCI announced Phase IV, which it said would provide "new
generation" text messaging and other data services and would be
completed within a year. Attempts to reach officials at MCCI to inquire
about Phase V were unsuccessful.
Copyright Thomson Reuters 2012