And You Think You’re Having a Bad Day?
13th July 2012
ZTE and its larger Chinese rival, Huawei, have been the subjects of great national security concern for years. The US intelligence community fears that, if allowed to install equipment here, the two companies will surreptitiously permit Chinese government wiretaps inside the United States . But proof of this suspicion has been hard to find. And the firms, backed by Chinese government-subsidized loans, have been able to offer enormous discounts to carriers, devastating the global telecom equipment market and leaving carriers eager to buy their products. Whether the US government would continue to act on its suspicions in the face of commercial pressure was an open question.
But wait, there’s more….
In March, Reuters reported that ZTE was supplying the Iranian mullahs with telecoms gear that could spy on Iran’s restive population. ZTE, the news agency reported, “has sold Iran’s largest telecom firm a powerful surveillance system capable of monitoring landline, mobile and internet communications, interviews and contract documents show.”
That was bad. But it got worse. Reuters further revealed that the ZTE system sold to Iran included equipment from US companies, like HP, Dell, Cisco and Juniper. Such sales violate US export control law. So ZTE soon faced an investigation by the US Commerce Department.