Nokia Siemens Networks boycotted in Iran over sale of surveillence equipment to government.

Wholesale vendors in the capital report that demand for Nokia handsets has fallen by as much as half in the wake of calls to boycott Nokia Siemens Networks (NSN) for selling communications monitoring systems to Iran.

There are signs that the boycott is spreading: consumers are shunning SMS messaging in protest at the perceived complicity with the regime by the state telecoms company, TCI. Iran's state-run broadcaster has been hit by a collapse in advertising as companies fear being blacklisted in a Facebook petition.

Nokia is the most prominent western company to suffer from its dealings with the Iranian authorities. Its NSN joint venture with Siemens provided Iran with a monitoring system as it expanded a mobile network last year. NSN says the technology is standard issue to dozens of countries, but protesters believe the company could have provided the network without the monitoring function. Siemens is also accused of providing Iran with an internet filtering system called Webwasher.

"Iranians' first choice has been Nokia cellphones for several years, partly because Nokia has installed the facility in the country. But in the past weeks, customers' priority has changed," said Reza, a mobile phone seller in Tehran's Big Bazaar.

"Since the news spread that NSN had sold electronic surveillance systems to the Iranian government, people have decided to buy other company's products although they know that Nokia cellphones function better with network coverage in Iran."

A Nokia spokeswoman refused to comment on the company's sales in Iran. The Iranian authorities are believed to have used Nokia's mobile phone monitoring system to target dissidents. Released prisoners have revealed that the authorities were keeping them in custody on the basis of their SMS and phone calls archive, which was at officials' disposal.