Cisco reportedly drops sales pact with ZTE after claims of roundabout Iran dealings

ZTE might already be feeling heat from Congressional suspicions, but the company could soon take a more direct hit to the pocketbook. Cisco has reportedly dropped an already rocky seven-year deal with ZTE after it learned that the Chinese firm had been selling Cisco's networking gear to the Telecommunication Company of Iran as recently as July of last year. Being implicated in an end-run around US trade sanctions isn't great for business, as you'd imagine. While Cisco CEO John Chambers wouldn't directly confirm the severed link in a chat with Reuters, he noted that we would "not see that [sort of deal] happen again" -- an indication that his company at least isn't happy with the current state of affairs. ZTE isn't waiting for any public acknowledgment to voice its frustration and says it's "highly concerned," although it's not helped by allegations from its own US general counsel that there was an attempt to cover up the Iranian link. Nothing is definite until the investigations go public, but the Iran connection could make it that much harder for ZTE to keep US customers regardless of its distance from the Chinese government.