CISCO Systems Inc. has ended a longstanding sales partnership with ZTE Corp. after an internal investigation into allegations that the Shenzhen-based telecom equipment maker sold Cisco networking gear to Iran.

    David Dai Shu, a ZTE spokesman, said of Cisco’s decision to cut ties: “ZTE is highly concerned with the matter and is communicating with Cisco. At the same time, ZTE is actively cooperating with the U.S. Government about the probe to Iran. We believe it will be properly addressed.”

    The U.S. House of Representatives’ Intelligence Committee said in a draft of a report released Monday that ZTE and fellow Shenzhen telecom equipment maker Huawei Technologies Co. Ltd. should be shut out of the U.S. market “because potential Chinese State influence on them poses a security threat.” Both companies deny the allegation.

    Cisco and ZTE partnered for the past seven years in a relationship that was at times rocky, according to a former Cisco executive with knowledge of the matter.

    ZTE described the initial partnership as an effort to develop business opportunities in China and Asia Pacific, excluding Japan.

    The partnership expanded about five years ago when Cisco began viewing ZTE as a means to combat Huawei, the world’s second-biggest maker of telecom equipment by revenue after Sweden’s Ericsson. Huawei had been beating out Cisco in emerging markets.

    (SD-Agencies)