ZTE has said it is going to scale back its business dealings with Iran after it was revealed the company sold the country's largest telecommunications company a surveillance system that can be used to monitor both the voice and data traffic of Iran's citizens. The revelations came in a Reuters piece on Thursday, which stated that the manufacturer had signed a contract worth $130.6 million with the Telecommunication Co of Iran last year. In addition to the surveillance system, a packing list associated with the contract also revealed several US-made hardware and software products — despite the fact that there is a ban on the sale of US technology items to Iran. In response, a ZTE spokesperson told Reuters that "we are going to curtail our business in Iran," but that it was a decision that company came to "some time ago."

Huawei found itself in a similar predicament last year, when the Wall Street Journal revealed the company's business had grown in Iran after Western companies had pulled out of the country. In December, Huawei pledged to limit the future growth of its business in Iran as well. The moves come as Iran faces increasing global political pressure due to concerns over its nuclear weapons aspirations. While Iran's telecommunications industry hasn't been targeted by sanctions specifically up to this point, on Friday the EU agreed to ban the sale of any telecom equipment to Iran that could be used for monitoring speech, a shift whose effect will only be compounded by ZTE's change in policy.