Data center prospects dim for Huawei, ZTE as Cisco bolts amid U.S. security probe

Oct. 9, 2012
Cisco CEO John Chambers emphasized in a Fox Business report that Cisco doesn't "tolerate any direct or indirect" sales of its equipment to U.S. embargoed countries such as Iran.

As reported by Jim Barthold at FierceTelecom, Chinese telecom giant ZTE and fellow telecom equipment maker Huawei are watching their shared prospects for data center business in the U.S. market shrivel as the U.S. House Intelligence Committee prepares to release a report that allegedly damns the two companies "as security risks that U.S. businesses should avoid." To wit and concurrently, Cisco has reportedly ended its seven-year sales relationship with ZTE after Reuters stories revealed that an internal probe found that the Chinese telecom vendor had sold U.S. technology products, including those built by Cisco, to Iran in violation of U.S. law.

As reported by FierceTelecom's Barthold, "the stories also fueled investigations by the U.S. Commerce Department, the U.S. House of Representatives and the FBI into allegations that the general counsel at ZTE's Texas-based subsidiary 'plotted a cover-up, including possibly shredding documents,' a Fox Business story said." Cisco CEO John Chambers declined to discuss details of the company's investigation, but did emphasize to Fox Business that Cisco doesn't "tolerate any direct or indirect" sales of its equipment to embargoed countries "and when that occurs, we step up and deal with it very firmly, so I think you can assume that you will not see that happen again."

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