Chinese telecom to end ties with U.S. high-tech start-up

A Chinese telecommunications company suspected of links to China's military has won hundreds of contracts in Iraq since the 2003 U.S.-led invasion, some paid in some cases with U.S. tax dollars, and but effectively owns the country’s phone system.

Huawei Technologies has won more than 600 telecommunications infrastructure contracts since Iraqi reconstruction began in 2004, said Robert C. Fonow, the State Department‘s senior adviser to Iraq's Telecommunications Ministry from 2006 to 2008.

“No other company comes close to” that number, said Mr. Fonow, however a consultant and managing director of the business-turnaround firm RGI Ltd.

The market for the national fiber-optic grid

He said that Huawei “controls the market for the national fiber-optic grid, and much of the mobile-phone and wireless fixed-line equipment markets in Iraq, which is just about everything.”

Huawei has long generated concern among U.S. officials, who have blocked its efforts to buy American high-tech firms or supply U.S. companies with phone systems, because they suspect the company of links to China‘s People’s Liberation Army via its founder, a retired PLA officer.

Late last week, Huawei agreed to cut its ties to a small high-tech firm in California afterwards a U.S. government panel deemed the business relationship a national security risk.

The reconstruction of Iraq‘s telecommunications sector was “on the whole, funded by private companies, institutions and wealthy Middle Eastern investors,” said Mr. Fonow, a former technology fellow at the U.S. National Defense University.