Nokia Siemens Defends Deal

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Nokia Siemens NetworksNokia Siemens Networks defended its decision to sell eavesdropping technology to Iran last year, saying on Tuesday it had followed trade rules and acted ethically.

Spokeswoman Riitta Mard said the Finnish-German company was surprised over the uproar following allegations that the Iranian government had used the Nokia Siemens NetworksNokia Siemens Networks' technology to monitor mobile phone calls and possibly emails, during the postelection protests, AP wrote.

In recent days, criticism of Nokia Siemens has spread over the Internet and in the media, with some claiming the company's technology helped the Iranian government violate civil liberties!

Last year, Nokia Siemens NetworksNokia Siemens Networks sold equipment to TCI, Iran's national telecommunications company, that is capable of monitoring local calls.

"But that's all there is to it," Mard said. "The system sold to TCI doesn't allow monitoring international calls, and it absolutely doesn't allow monitoring Internet and data communication, not even SMS or picture messages."

In most countries, including all European Union members and the United States, mobile networks are required by law to provide capability for monitoring local calls.

Nokia Siemens NetworksNokia Siemens Networks is a 50-50 joint venture of Nokia Corp., the world's top mobile phone-maker, and German Siemens AG. It employs 60,000 people worldwide.

Bharti-MTN Deal
Meanwhile, a big jump in the number of mobile phone subscribers in Iran last quarter was welcome news for MTN Group, but potentially troublesome for US banks eyeing a role in the South African Telco's planned $20-billion-plus merger.

When MTN and India's Bharti Airtel first discussed a tie-up more than a year ago, MTN had around 6 million users in Iran. Its business there, and in Sudan and Syria, has since grown--a fact that has not escaped US banks milling around the deal, Reuters wrote.

Nobody in Washington DC is saying publicly that US banks should be barred from playing a role in the merger of the two emerging market telecom companies. Not yet, anyway.

But MTN's annual report says 13 percent of its 2008 revenues came from Iran, Sudan and Syria--three states where the US Treasury's Office of Foreign Assets Control (OFAC) sets tough restrictions on US firms, effectively banning them from most direct and indirect dealings due to US sanctions.

The number of MTN's subscribers in Iran alone rose 14 percent to 18.2 million last quarter.

Bank of America-Merrill Lynch is advising MTN on the deal, with Deutsche Bank. Sources involved in the offer say Goldman Sachs is advising Bharti shareholder Singapore Telecommunications, which owns 31 percent of the Indian company. Both BofA and Goldman declined to comment.

Several other US banks are in talks to provide financing for the merger plan, sources say, which involves Bharti and MTN buying into each other to create the world's No.3 wireless group.

While US lenders would like a cut of the deal, sources at the banks say there is a lot of discussion at top levels to determine how to proceed within the boundaries of OFAC.

What sets the Bharti-MTN deal apart from other deals touching on the subject is its size--at more than $20 billion it's one of the biggest M&A deals in the world right now--and the growth of MTN's businesses in the sanctioned areas.

One investment banker not involved in the deal said MTN's business in Iran, Sudan and Syria is expected to keep growing.

And that growth could bring the revenue contribution closer to the 25 percent benchmark but, by then, the deal could have closed and the banks could have secured hefty fees for their work.

© Iran Daily 2009