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 that "make it almost impossible for Nokia Siemens Networks to do business with Iranian customers." The Wall Street Journal obtained a copy of the letter.
"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 action by the company—a joint venture between Nokia Corp. and Siemens AG—ramps up economic pressure on Iran, which has a growing mobile-phone industry that the government controls. Last week, Chinese telecommunications-equipment maker Huawei Technologies Co. said it won't seek new customers in Iran and will limit its business activities with existing customers.
An article on page one of the Journal in October documented the growth in Huawei's business in Iran after Western companies, including NSN, pulled back following the government's bloody crackdown on its citizens two years ago. In recent months, companies have been under growing international pressure not to provide technology that enables repressive regimes to crack down on dissidents.
In its letter, NSN said there were "serious concerns" over whether the shareholding structures of some of its Iranian customers meant the venture was prohibited from doing business with them under international sanctions. NSN said it was monitoring the situation "continuously."
The venture also said it had "a high degree of certainty" that Finland and Germany wouldn't renew its export contracts to Iran because of "international pressure." It also said that sanctions on financial institutions have made it difficult for NSN to transfer money out of Iran for about a year.
NSN, which has about 400 employees in Iran, announced last month it would cut nearly a quarter of its global work force of 74,000 in a broad restructuring to focus on mobile broadband.
The venture came under fire in 2009 after Siemens disclosed that NSN 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 another operator, 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.
In recent months, international pressure against Iran has intensified because of a continued standoff between the Islamic Republic and the West over the Iranian nuclear program. The West says Iran is pursuing a military nuclear program, but Iran rejects the claim, saying the program is for peaceful purposes.
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