Ericsson Committed to Long-Term Cooperation with Iran Telecoms [FARS News Agency]
(FARS News Agency Via Acquire Media NewsEdge) A Tuesday report by Reuters said the involvement of Ericsson, the world's largest mobile network equipment maker, comes despite US-led Western sanctions on Iran. Ericsson argues in an internal document that telecommunications are a "basic humanitarian service", the report added.
Standard telecommunications equipment does not fall under sanctions, it said.
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.
He declined to discuss the nature of the work Ericsson is undertaking, its value or how the company will be paid.
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.
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.
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 organizations 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."
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."
Ericsson is not the only firm which has maintained its good relations with Iran despite the western sanctions against the country.
Following the US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, , but not getting into big deals that could endanger their interests in the US.
Yet, after many international enterprises in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of projects and earn billions of dollars, they started showing increasing interest in investment or expansion of work in Iran.
Some European states have also recently voiced interest in investment in Iran's energy sector after the gas deal was signed between Iran and Switzerland regardless of the US sanctions.
The National Iranian Gas Export Company and Switzerland's Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March 2008 for the delivery of 5.5 billion cubic meters of gas per year.
The biggest recent deal, worth €100m ($147m, £80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this year to build equipment for three gas conversion plants in Iran.
In December 2010, the New York Times reported that over the past decade, United States-based companies have done billions of dollars in trade with Iran despite sanctions and trade embargoes imposed on Tehran.
One American company, the daily said, was permitted to do work on an Iranian gas pipeline, despite sanctions aimed at Iran's gas industry in particular.
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