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Iran Feature: The Chinese Telecom Giant Helping Tehran Track and Block Its Opponents (Stecklow/Fassihi/Chao)

Steve Stecklow, Farnaz Fassihi, and Loretta Chao write for The Wall Street Journal:

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. Huawei notes that nearly all countries require police access to cell networks, including the U.S.

Huawei's role in Iran demonstrates the ease with which countries can obtain foreign technology that can be used to stifle dissent through censorship or surveillance. Many of the technologies Huawei supports in Iran—such as location services—are available on Western networks as well. The difference is that, in the hands of repressive regimes, it can be a critical tool in helping to quash dissent.

Last year, Egyptian state security intercepted conversations among pro-democracy activists over Skype using a system provided by a British company. In Libya, agents working for Moammar Gadhafi spied on emails and chat messages using technology from a French firm. Unlike in Egypt and Libya, where the governments this year were overthrown, Iran's sophisticated spying network remains intact.

In Iran, three student activists described in interviews being arrested shortly after turning on their phones. Iran's government didn't respond to requests for comment.

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.

This year Huawei made a pitch to Iranian government officials to sell equipment for a mobile news service on Iran's second-largest mobile-phone operator, MTN Irancell. According to a person who attended the meeting, Huawei representatives emphasized that, being from China, they had expertise censoring the news.

The company won the contract and the operator rolled out the service, according to this person. MTN Irancell made no reference to censorship in its announcement about its "mobile newspaper" service. But Iran routinely censors the Internet using sophisticated filtering technology. The Journal reported in June that Iran was planning to create its own domestic Internet to combat Western ideas, culture and influence.

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's chief spokesman, Ross Gan, said, "It is our corporate commitment to comply strictly with all U.N. economic sanctions, Chinese regulations and applicable national regulations on export control. We believe our business operations in Iran fully meet all of these relevant regulations."

William Plummer, Huawei's vice president of external affairs in Washington, said the company's location-based-service offerings comply with "global specifications" that require lawful-interception capabilities. "What we're doing in Iran is the same as what we're doing in any market," he said. "Our goal is to enrich people's lives through communications."

Huawei has about 1,000 employees in Iran, according to people familiar with its Iran operations. In an interview in China, a Huawei executive played down the company's activities in Iran's mobile-phone industry, saying its technicians only service Huawei equipment, primarily routers.

But a person familiar with Huawei's Mideast operations says the company's role is considerably greater, and includes a contract for "managed services"—overseeing parts of the network—at MTN Irancell, which is majority owned by the government. During 2009's demonstrations, this person said, Huawei carried out government orders on behalf of its client, MTN Irancell, that MTN and other carriers had received to suspend text messaging and block the Internet phone service, Skype, which is popular among dissidents. Huawei's Mr. Plummer disputed that the company blocked such services.

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